29.07.2025 21:48
The Securities and Exchange Commission (SEC) has significantly altered its approach to Bitcoin and Ethereum exchange-traded funds (ETFs), approving in-kind creation and redemption mechanisms. This landmark decision replaces the previous cash-only system, marking a substantial shift in the regulatory landscape for digital assets.
This new approach allows authorized participants to directly exchange Bitcoin and Ether when creating or redeeming ETF shares. This streamlined process promises notable cost reductions and enhanced tax efficiency for both investors and issuers, fostering a more accessible and economically advantageous market for cryptocurrency investment products. The implications are far-reaching, potentially boosting the attractiveness and liquidity of these ETFs.
SEC Chairman Paul S. Atkins hailed the decision, stating that establishing a functional regulatory framework for cryptocurrency markets is a key priority. He emphasized the investor benefits inherent in this improved efficiency and lower costs associated with the in-kind model. Industry experts echoed these sentiments, viewing the move as a sign of positive progress.
Bloomberg ETF analyst Eric Balchunas described the SEC's "order granting accelerated approval" as a strong indication of a broader wave of ETF approvals on the horizon. He predicted a flurry of further approvals by early autumn. Concurrently, James Seyffart, another Bloomberg analyst, suggested this sets a precedent for future altcoin ETFs, anticipating that they too will incorporate in-kind creation and redemption mechanisms from the outset. Both analysts interpreted this development as a positive step towards a more accommodating regulatory environment.
Beyond the in-kind approval, the SEC advanced other crucial crypto ETF developments. These include approvals for ETFs combining both Bitcoin and Ethereum, the introduction of listed and FLEX options on Bitcoin ETFs, and an increase in position limits for Bitcoin ETF options to a substantial 250,000 contracts. Further showcasing the SEC's evolving stance, two new scheduling orders were issued for large-cap crypto ETF proposals, underscoring the commission's evident shift toward a more structured and neutral regulatory framework for the digital asset sector. The source for this information is internet sources.
