On January 19, Jenny Johnson, the President and CEO of Franklin Templeton, appeared on CNBC’s “Squawk Box” to discuss the firm’s latest financial offerings, market trends, and predictions for the year.

Franklin Templeton is a global investment management organization known for its mutual funds and investment services. It was founded in New York in 1947 by Rupert H. Johnson, Sr., and named after American polymath Benjamin Franklin, reflecting the company’s emphasis on frugality and conservatism in investment.

Here are the key points from Johnson’s interview:

  1. Spot Bitcoin ETF Launch and Demand:
    • Franklin Templeton, managing $1.5 trillion in assets, recently launched a spot Bitcoin ETF.
    • Johnson highlighted the significant demand for Bitcoin, considering it a key part of blockchain technology’s future.
    • She believes Bitcoin’s role extends beyond investment, serving as a safety net in countries with unstable political or economic conditions.
  2. Spot Bitcoin ETF vs. Personal Keys:
    • While acknowledging the fundamental value of holding Bitcoin personally, Johnson noted the complexities involved in managing private keys.
    • The ETF offers an accessible way for investors to enter the Bitcoin market through traditional brokerage accounts.
  3. Market Outlook for 2024:
    • Johnson expressed skepticism about the market’s optimistic expectations for Federal Reserve rate cuts.
    • She anticipates cuts will be modest and not occur until the second half of 2024.
    • Retail sales and wage increases suggest persistent inflation, potentially affecting the Fed’s decisions.
  4. Money Market Funds:
    • Approximately $60 billion of Franklin Templeton’s assets are in money market funds, currently earning around 5.1%.
    • Johnson sees these funds as a potential source of capital for other markets when conditions change.
  5. Shift in Market Dynamics:
    • Johnson observed a significant concentration in market capitalization among a few major companies, comparing it to the dot-com era.
    • She anticipates a shift in opportunities towards other market areas, though this change has not yet occurred.
  6. Adapting to Client Preferences and ETF Growth:
    • Franklin Templeton focuses on delivering active investment strategies through various vehicles, including ETFs, mutual funds, and separately managed accounts.
    • Johnson noted the rise of ETFs, particularly actively managed ones, and emphasized the firm’s commitment to adapting to evolving market and client needs.

Regarding the use of Bitcoin for asset protection, according to a report from The Daily Hodl, she said:

“One of the things that made me a believer is I went around the world talking to people…. I had somebody who said ‘I keep 50% of my savings in Bitcoin because if I say the wrong thing in my country, I could have my assets confiscated.’

I remember talking to somebody in Israel who said, ‘My parents and their parents had all their assets confiscated.’ They keep a portion of [their savings] in Bitcoin, so there’s a fear component to it that is considered almost an insurance or safety component. But I also think it’s really important to fueling what is the next real opportunity in this blockchain world.”

Last month at the Fortune Global Forum in Abu Dhabi, Johnson engaged in a discussion with Anna Tutova, the CEO of Coinstelegram.

During the interview, Johnson shed light on Franklin Templeton’s ongoing engagement with blockchain technology, including their recent move to file for a Franklin Bitcoin ETF. She underscored the significance of distinguishing between Bitcoin and blockchain technology, pointing out the latter’s ability to make private markets more accessible by reducing transaction-related complexities. Blockchain facilitates the easier handling and transfer of ownership for assets that are typically challenging to manage.

Johnson views blockchain as a key instrument in introducing non-traditional asset classes and enhancing the efficiency of existing financial instruments. She cited the creation of a tokenized money-market fund and a blockchain-based shareholder recordkeeping system, where Franklin Templeton participates as a node validator. These initiatives reflect the firm’s confidence in blockchain to enhance efficiency, reduce fraud, and eliminate delays in financial transactions.

She also shared that her personal investments include cryptocurrencies, though they constitute a minor fraction of her total portfolio. Her investments span well-known cryptocurrencies like Bitcoin (BTC) and Ether (ETH), along with others such as SushiSwap (SUSHI) and Uniswap (UNI).

Johnson also touched on the achievements of Franklin Templeton’s U.S. tokenized money-market fund, which has attracted more than $270 million in inflows. She anticipates the emergence of further investment avenues as blockchain technology continues to evolve. In terms of NFTs, while Johnson acknowledges their potential within certain established investment areas, she advises a cautious approach, comparing some elements of the NFT market to the complexities of art valuation.

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