Global investment firm Franklin Templeton took to X on Wednesday to share its thoughts on layer-1 blockchains, leading to speculation that the Wall Street giant could be focusing more on crypto-based exchange-traded products (ETPs).
Franklin Templeton Praises Layer-1 Blockchains, Focusing On Solana And Ethereum
The $1.4 trillion asset manager’s digital assets research division said that it believes that as blockchains improve in fees and performance their potential use cases can “grow exponentially”, before adding that the technology’s impact on improving the economics and experience for the end user “cannot be overstated”.
Franklin Templeton also emphasized the significance of layer-1 blockchains, describing them as a “reinvention of intermediaries in the financial sector.”
Last week, the investment firm joined BlackRock, Fidelity, VanEck, Ark Invest, and Grayscale in having their spot Bitcoin ETFs approved by the US Securities and Exchange Commission (SEC). Notably, the Franklin Bitcoin ETF (EZBC) set the record for having the lowest fee among the 11 ETFs green-lit by the securities regulator, reducing its annual fee by 10 basis points to 0.19%, from 0.29%.
The digital assets team also touched on the speculative nature of crypto assets, calling it a “feature” rather than a “bug”. They explained that speculation drives much of the crypto market, influencing both its volatility and investment appeal.
Talking of Bitcoin, the team said it was paying close attention to the Ordinals and other Layer-2 solutions built on top of the Bitcoin network. They believe these advancements are crucial for addressing the apex cryptocurrency’s economic security-related issues and its utility as a store of value (SoV).
Franklin Templeton “Impressed” By Solana’s Strong Showing in Q4 2023
While the main topic of discussion was Bitcoin and the developments happening on top of the blockchain, Franklin Templeton’s research team also expressed their admiration for Solana, saying co-founder Anatoly Yakovenko’s vision of a “single atomic state machine” offers a powerful use case for decentralized blockchains.
“We are impressed by all the activity seen on Solana in Q4 2023,” added the digital assets division.
Franklin Templeton highlighted DePIN, meme coins, NFTs, DeFi, and high-performance validator client Firedancer as the projects driving activity on Solana’s vibrant ecosystem.
The Trillion Dollar Asset Manager Also Expects Ethereum to Make a Strong Comeback
The ETF issuer also praised Ethereum and its ecosystem, noting that despite the “midlife crisis” the blockchain recently experienced, the company sees a “bright future with many strong tailwinds” pushing the network forward.
The investment giant also highlighted several factors that it believes could contribute positively to Ethereum’s momentum, such as the EIP 4844 “proto-dank sharding” upgrade, alternative decentralized applications (Alt DA), community revitalization, and re-staking.
Franklin Templeton concluded the thread by acknowledging the untapped potential of other Layer-1 blockchains outside of Bitcoin, Ethereum, and Solana. Although the firm did not specifically mention the projects’ names, it said that it will continue to “support, monitor, and develop” these blockchains “as they grow and mature”.
When asked if there are plans for launching any potential crypto-based funds in the future, a spokesperson for Franklin Templeton said they cannot comment on the matter but are “continuously monitoring developments in the digital assets and ETF ecosystems for opportunities to diversify” its offerings.“