According to Franklin Templeton, who manages over $1.4 trillion in assets, cryptocurrencies could become “regular parts of people's portfolios” once regulations are clear in the US.
Sandy Kaul, head of digital assets and industry advisory services at Franklin Templeton, said that while investors can now buy crypto directly, there are limited ways for them to incorporate digital assets into traditional portfolios.
In a phone interview, Kaul said that if a spot Bitcoin ETF is approved, it “could open a new access point for crypto to enter traditional portfolios and start offering a truly new type of asset class to diversify portfolios.”
Kaul said he expects more regulatory clarity from US regulators. While some regulators say that the existing laws are sufficient for crypto, Kaul said that “they do not provide a way of how to use the existing laws, which makes people feel that the existing laws are not enough. I think the regulators leave too much uncertainty in the system.”
If the SEC can clarify which cryptocurrencies can be registered as U.S. securities, “we can include them in broader portfolios,” Kaul said:
“If you think of Ethereum as a software development platform, we can put Ethereum in a portfolio with traditional companies operating in software development. We can then put them in industry funds where they are most relevant and compare the growth in market share with other companies in that industry.”
*Not investment advice.