Are bitcoin dividend ETFs setting the stage for $4T crypto race on Wall Street?

00:00 Speaker A

Franklin Templeton files first Bitcoin dividend ETFs. Stock income buys Bitcoin automatically. So these are called DRIP ETFs, D R I P. Now, this is an existing structure that’s been around for a very long time.

00:13 Speaker A

It’s a dividend uh reinvestment, uh which is what DRIP is, right? And so what this is going to do, and they filed two of them, is effectively, you’ll have a basket or an index within the ETF and those of them that have dividends, that dividend will be directly used to purchase Bitcoin into that fund.

00:33 Speaker A

So it’ll be 95% equities, 5% Bitcoin and this is targeted to launch in September. So, this is as I said, not a new product in that there are plenty of these DRIP ETFs that redirect the dividends back into the asset.

00:49 Speaker A

So basically, you know, if you have a dividend uh yielding stock, uh you get that dividend and the ETF automatically uses that dividend to buy more of that stock.

01:00 Speaker A

But this is the first time that it’s being used to buy Bitcoin and this is once again a new and novel product for us that it already exists in the market as an extremely popular and it shows the maturation of products around Bitcoin and crypto.

01:14 Speaker A

So, I think that this is absolutely going to be huge. I mean, Franklin Templeton, I believe has 1.3, 1.4 trillion assets under manage and will be continuing to aggressively pitch these new products to their customer base.

01:26 Speaker A

I think it’s absolutely huge. On the other side, we have another huge uh entity, which is Morgan Stanley.

01:35 Speaker A

Now, Morgan Stanley targets crypto ETF fee crown, while Franklin Templeton wants your stock dividends buying Bitcoin. So this is the second half of somewhat of the same story, which is more products being offered to retail in the United States around crypto and Bitcoin.

01:51 Speaker A

Now, what they’re doing here, we saw when Morgan Stanley came into the ETF race a few months ago. I reported on it widely, you can go back and watch those shows.

02:02 Speaker A

But what was interesting there is that Morgan Stanley generally doesn’t issue ETFs, but they had the opportunity to enter a very crowded Bitcoin spot ETF space with their own ETF and their sales force of 15 to 16,000 advisors out there pitching it. Why give the fees to BlackRock when you can create your own product and capture those fees themselves?

02:22 Speaker A

But it wasn’t just about themselves because they came in with the lowest fee product in the market at 14 bips. That is an exceptionally cheap product. It undercut all the existing Bitcoin spot ETFs. And so that was a huge story because it meant that they were also clearly intending to try to compete in the retail space.

02:46 Speaker A

Now, they’re coming in now, this announcement is they have amended their filings for their upcoming Ethereum ETF and their upcoming Solana ETF, both with 14 BIP products.

03:00 Speaker A

So this is the same uh sort of playbook that they recently took with Bitcoin that they’re now taking with Ethereum and Solana, they will come in as the cheapest. Uh I believe Eric Balchunis from Bloomberg ETF said that this was going to be the cheapest offerings in the market that he’s effectively ever seen.

03:16 Speaker A

I mean, Wall Street basically spent 10 years calling crypto rat poison. Now they’re in a price war where war over who gets to serve you that rat poison.