29.07.2025 21:51
The Securities and Exchange Commission (SEC) has significantly altered the landscape of cryptocurrency exchange-traded products (ETPs) by approving in-kind redemptions for spot Bitcoin (BTC) and Ethereum (ETH) ETFs. This landmark decision, announced on July 29th, brings these crypto funds in line with the established practices for commodity-based ETPs, a move the SEC claims will boost market efficiency and lower costs for investors.
Chairman Paul Atkins hailed the approval as a pivotal step towards creating a modern regulatory framework for crypto asset markets, emphasizing the resulting cost savings and increased efficiency for investors. Echoing this sentiment, Jamie Selway, head of the Division of Trading and Markets, described the decision as a substantial advancement, granting greater operational flexibility to both issuers and authorized participants (APs). The SEC's proactive approach extends beyond in-kind redemptions; they concurrently approved applications for a blended Bitcoin-Ether ETP, options trading on several Bitcoin ETPs, including FLEX options, and a substantial increase in position limits for options contracts on specific Bitcoin ETPs.
Further demonstrating their commitment to a comprehensive regulatory approach, the SEC initiated a process to gather public comment regarding delegated approvals for two large-cap crypto-based ETPs. This development followed Cboe's July 22nd amendments to relevant products, a move previously interpreted by ETF analysts as a promising indicator. The core change lies in allowing authorized participants – typically large financial institutions – to directly exchange Bitcoin and Ethereum when creating or redeeming ETF shares.
This structural shift, while largely invisible to the average investor, significantly impacts the operational efficiency of these funds. Instead of managing substantial cash positions, APs can now seamlessly transfer crypto assets, streamlining the process and potentially reducing costs associated with large-scale cash transactions. In essence, the SEC’s actions represent a considerable leap forward in integrating cryptocurrencies into the traditional financial market structure. This reflects a forward-looking regulatory strategy, shaping the future of crypto investment vehicles. Information regarding this development was obtained from internet sources.
