Bitcoin: this new ETF transforms S&P 500 dividends into BTC

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https://cryptoast.fr/bitcoin-ce-nouvel-etf-transforme-les-dividendes-du-sp-500-en-btc/

American asset manager Franklin Templeton is preparing to launch 2 “Bitcoin DRIP” ETFs on Nasdaq. On October 22, he filed with the SEC the final document necessary for their listing. Their prospectus comes into effect on October 27, 2026, and the funds can therefore arrive on the stock market in the coming days.

The Franklin US Equity Bitcoin DRIP Index ETF (ticker FBEQ) replicates a VettaFi index of the 500 largest US companies, close to the S&P 500, for a fee of 0.09% per year. Its twin, the Franklin US Innovation Bitcoin DRIP Index ETF (FIBT), targets the 100 largest Tech companies on the Nasdaq, modeled on the Nasdaq 100.

The principle is similar to that of the DRIP (Dividend Reinvestment Plan), with one difference: dividends are not used to buy back shares. At launch, each index is 95% stocks and 5% bitcoin. All dividends are then reinvested into Bitcoin.

Exposure comes through Bitcoin ETPs, starting with the Franklin Bitcoin ETF (EZBC), the spot ETF that the manager already markets, but also through futures or options. On this ETF, Franklin Templeton waives its share of its fees to avoid double billing.

With these funds, Franklin Templeton is banking on an idea that is gaining ground among large managers: adding a small pocket of Bitcoin to a classic stock portfolio. You still have to know how to manage this part over time, especially when the market is racing. Knowing when to enter the market, when to exit, and sticking to it when the time comes, is precisely the heart of the Crypto Strategist method, Cryptoast's premium service 👇

At each quarterly rebalance, if bitcoin weighs more than 5% of the index, it is reduced to 4.5%. If it weighs 5% or less, nothing changes. Between two quarters, if the pocket exceeds 20%, it is reduced to 4.5% within two working days.

The mechanism is therefore asymmetrical: in the event of a strong rise in bitcoin, the fund takes its profits each quarter and reinjects the surplus into stocks. In the event of a decline, he does not buy back bitcoin to return to 5%: the pocket is only replenished at the rate of dividends paid.

However, these dividends remain modest because large American capitalizations distribute barely more than 1% per year, and even less for Nasdaq technology stocks. The BTC accumulation effect will therefore be relatively slow.

A priori, no, because, like the American spot Bitcoin ETFs, these funds do not have the key information document (DIC) required by European regulations to be offered to individuals. Consumer brokers therefore do not list them.

Machine-translated from French