Key Takeaways
- The SEC approved in-kind creation and redemption for Bitcoin and Ethereum ETFs, replacing the cash-only model.
- Analysts expect altcoin ETF approvals to follow with in-kind mechanisms from the outset.
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The SEC has approved in-kind creation and redemption mechanisms for spot Bitcoin and Ethereum exchange-traded products, aligning them with traditional commodity ETFs and replacing the previous cash-only model.
The move allows authorized participants to deliver or receive Bitcoin and Ether directly when issuing or redeeming shares, cutting costs and improving tax efficiency for issuers and investors alike.
“It’s a new day at the SEC,” said Chairman Paul S. Atkins. “A key priority of my chairmanship is developing a fit-for-purpose regulatory framework for crypto asset markets. Investors will benefit from these approvals, as they will make these products less costly and more efficient.”
Bloomberg ETF analyst Eric Balchunas welcomed the shift, noting in a post on X that the SEC’s “order granting accelerated approval” signals a broader wave of ETF approvals. He added that more greenlights are likely coming by early fall.
Fellow Bloomberg analyst James Seyffart said the approval sets the tone for what’s ahead, noting that future altcoin ETFs will likely allow in-kind creation and redemption from the start. He called it continued movement in the right direction.
Alongside in-kind approval, the SEC advanced other crypto ETF developments, including approvals for mixed BTC-ETH ETPs, listed and FLEX options on Bitcoin ETFs, and raised position limits on BTC ETF options to 250,000 contracts.
Two new scheduling orders were also issued for upcoming large-cap crypto ETF proposals, continuing the Commission’s shift toward a more neutral and structured regulatory regime.
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