Franklin Templeton has filed to list two exchange-traded funds that convert the cash dividends from a U.S. stock portfolio into bitcoin. The October 22, 2026 registration covers the Franklin US Equity Bitcoin DRIP Index ETF (FBEQ) and the Franklin US Innovation Bitcoin DRIP Index ETF (FIBT), both headed for Nasdaq. Both are series of the Franklin Templeton ETF Trust, a Delaware statutory trust whose registration statement for these funds has been amended through several filings since June 2026.
How the two funds are built
Each fund pairs a 95% U.S. equity index allocation with a 5% bitcoin sleeve at inception. FBEQ tracks the VettaFi US Large-Cap 500 Bitcoin DRIP Index, a float-adjusted benchmark of the 500 largest U.S. companies. FIBT tracks the VettaFi US Innovation 100 Bitcoin DRIP Index, built from the 100 largest non-financial U.S. issuers on Nasdaq. The DRIP label refers to the reinvestment mechanism: regular and special dividends from the stock sleeve go into bitcoin rather than being paid out or put back into equities.
The cap that keeps the sleeve small
The structure limits how far bitcoin can drift. Overall bitcoin exposure is capped at 20% of the fund. At each quarterly rebalance, a sleeve above 5% gets trimmed to 4.5%; at 5% or below, it stays put. The reset point sits under the trigger, so every trim leaves headroom before the next test. Bitcoin is priced off the Kaiko Bitcoin New York Reference Rate at 4:00 p.m. Eastern time. FBEQ carries a 0.09% management fee and FIBT 0.19%.
The buying is modest by design
Only the dividend flow, not the fund balance, gets converted to bitcoin, and U.S. large-cap dividends are a small fraction of assets. On a hypothetical $100 million fund, a roughly 1% to 2% dividend yield would translate to a few million dollars of bitcoin purchases per year before rebalancing. A spot bitcoin ETF, by contrast, holds roughly one dollar of bitcoin for every dollar invested, so the DRIP wrapper is far less bitcoin-intensive per dollar of assets even if the sleeve runs toward its 20% ceiling.
What a Form 8-A does and does not do
The filing is a Form 8-A, which registers a class of securities with an exchange under Section 12(b) of the Securities Exchange Act. Registration does not amount to SEC approval: the prospectus, dated October 27, 2026, states that the SEC has neither approved nor disapproved the funds. No seed capital, asset target, or confirmed first trading day appears beyond that effective date.
The recurring bid may matter more than the weight
The starting sleeve is small, but the design creates a mechanical bitcoin buyer on every ex-dividend date, independent of what any trader expects from the price. A 5% sleeve with a quarterly reset will also sell some of that bitcoin back into equities whenever the position drifts upward. Whether the wrapper gathers assets after October 27 decides whether the recurring bid amounts to anything. Neither the registration nor the mechanism creates inflows by itself, so the first flow print is the number to watch.
Adapted from Franklin Templeton Registers Bitcoin DRIP ETFs That Reinvest Stock Dividends Into BTC.