The firm has filed a corresponding application with the SEC. We break down a new way to accumulate BTC▲$63,069.00 without buying the cryptocurrency directly.
Global asset manager Franklin Templeton has filed an SEC application to launch two exchange-traded funds that automatically reinvest stock dividends into bitcoin. The funds are the Franklin U.S. Equity Bitcoin DRIP Index ETF and the Franklin U.S. Innovation Bitcoin DRIP Index ETF.
DRIP stands for Dividend Reinvestment Plans—a long-established mechanism for compounding equity positions. In this new structure, the mechanism has been repurposed for bitcoin accumulation. This is the first time an ETF structure has used a dividend stream to systematically buy cryptocurrency.
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How the New ETFs Work: 95% Stocks, 5% Bitcoin — With a 20% Cap
The funds will track the VettaFi US Large-Cap 500 Bitcoin DRIP and VettaFi US Innovation 100 Bitcoin DRIP indexes. At launch, the allocation is 95% to large-cap US stocks and 5% to bitcoin (BTC). During quarterly rebalancing, BTC allocations above 5% are trimmed back to 4.5%, with a 20% cap in between rebalancing periods.
The funds gain bitcoin exposure through exchange-traded products, including Franklin Templeton’s own ETPs, futures, options, and in some cases, through a Cayman Islands subsidiary.
As of April 30, the underlying equity index included about 498 stocks with market caps ranging from $7.5B to $4.9T. Investors get broad US equity exposure while accumulating bitcoin through dividend flows—without needing to set aside separate capital for crypto purchases.
A Wave of Structural Crypto ETFs After SEC Rule Changes
Franklin Templeton‘s filing is part of a broader wave of innovative crypto ETFs following the SEC’s publication of general listing standards for crypto-related funds in late 2025.
Bitwise expects more than 100 such products to launch in 2026. Bloomberg Intelligence has counted over 100 filings in issuer pipelines. After the dominance of spot products like BlackRock’s IBIT with tens of billions in assets, issuers are shifting to competition on structure and yield. Covered call products, yield-generating funds, and now DRIP structures are entering the market.
This isn’t Franklin Templeton’s first crypto move. The firm already manages an U.S. spot bitcoin (BTC) ETF with $358.9M in assets. In May, it partnered with Payward, Kraken’s parent company, to tokenize traditional investment products. Its BENJI tokenized money market fund is already live on several blockchains.
The DRIP structure creates a new, passive demand channel for bitcoin. Investors get a diversified stock portfolio with gradual BTC accumulation—without making a separate decision to buy crypto.
