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It’s all about the Benjamins. And the bitcoins, apparently.
Traditional financial firms are pushing deeper into digital assets, and the latest move comes from San Mateo, California-based Franklin Templeton. The asset manager, long established in mutual funds and ETFs, has acquired 250 Digital, a spinoff of venture firm CoinFund. The business will be rebranded as Franklin Crypto and will offer digital asset strategies to institutional investors. “Our focus today is institutional, but advisor interest is definitely growing as the market becomes easier to understand and the use cases become more tangible,” Sandy Kaul, head of innovation at Franklin Templeton, told Advisor Upside.
The crypto space is still small, with a global market cap of just $2.44 trillion (yes, it does feel weird putting just before a number ending in trillion), but the hype train is barreling down the tracks and TradFi is hopping on board. “Franklin is as old school as old school can get, but they want a seat at the table because they believe this asset class is going somewhere,” said James Seyffart, senior research analyst at Bloomberg Intelligence.
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With President Donald Trump and Securities and Exchange Commission Chair Paul Atkins championing crypto, TradFi firms have begun rapidly expanding into the market. “Franklin has leaned hard into crypto and launched pretty much every crypto ETF under the Sun,” Seyffart told Advisor Upside. “They haven’t found the same success as other issuers, but it’s hard out there. They see a lot of growth potential in crypto and aren’t showing any signs of slowing down.”
Plenty of traditional Wall Street firms have launched spot crypto ETFs in the past two years. Morgan Stanley plans to debut a spot Bitcoin ETF at just 14 basis points, significantly undercutting competing funds. If approved, it would be the first fund of its kind issued by a US bank. T.Rowe Price, another legacy asset manager, updated a filing for a crypto ETF last month, and it’s expected to have exposure to alternative coins like Dogecoin, Avalanche and Shiba Inu. “Firms offering these funds have never seemed more bullish on crypto, blockchain and digital assets in the nine years I’ve been covering the space,” Seyffart said.
Not So Different, You and I. While institutions command far more capital than financial advisors, their crypto exposure is often surprisingly similar in relative terms, suggesting institutions are just as hopefully cautious about crypto as many RIAs out there:
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Harvard University’s endowment holds more than $350 million in crypto ETFs, but that’s less than 1% of its $57 billion portfolio.
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Abu Dhabi’s sovereign wealth fund, the Mubadala Investment Company and one of its subsidiaries, held more than $1 billion worth of the iShares Bitcoin Trust ETF (IBIT) at the end of last year. Again, that whole portfolio has more than $330 billion in assets.
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Pension funds in California, Wisconsin, Florida and other states dedicate millions to crypto exposure, with allocations often remaining under 1% of the total portfolio.
“It’s not necessarily that advisors aren’t interested in crypto, but for the most part, they’re looking at a 1% to 3% allocation rather than 25% of a portfolio,” Seyffart said.
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