Franklin Templeton has filed applications with the US Securities and Exchange Commission for two new exchange-traded fund strategies dubbed "Bitcoin DRIP." The proposed funds would hold a portfolio of US equities but deviate from standard dividend-reinvestment practices by automatically purchasing bitcoin with all dividend income generated by the underlying holdings, rather than distributing cash to investors or reinvesting in additional shares of the same equities.
The filing represents a novel attempt to bridge traditional equity income strategies with cryptocurrency exposure.
By structuring the funds to convert dividend yields into bitcoin, Franklin Templeton aims to offer investors a passive mechanism for accumulating digital assets without requiring active trading decisions or direct custody of the cryptocurrency.
The strategy effectively uses the cash flow from established US companies as a funding source for bitcoin purchases.
This development adds to the growing list of institutional products seeking to integrate bitcoin into mainstream investment portfolios.
While spot bitcoin ETFs have already gained approval, these DRIP-focused strategies target a different investor segment: those seeking yield-oriented equity exposure who also want incremental crypto accumulation.