30.07.2025 01:11
The U.S. Securities and Exchange Commission (SEC) has dramatically reshaped the American cryptocurrency landscape. A landmark decision now permits in-kind redemptions for spot Bitcoin and Ethereum exchange-traded funds (ETFs), a pivotal shift that allows funds to directly exchange physical cryptocurrency instead of cash equivalents. This groundbreaking change brings digital asset ETFs into line with established commodity funds like those backed by gold, a development the industry has eagerly anticipated for years.
This regulatory overhaul significantly impacts ETF operations. Authorized participants can now create and redeem ETF shares using actual Bitcoin or Ethereum, streamlining processes and reducing operational costs. This enhanced efficiency mirrors the functionality of traditional commodity ETFs. SEC Chair Paul Atkins framed the update as a key component of a larger initiative aimed at modernizing regulatory frameworks to better reflect the unique characteristics of digital finance. Similarly, Jamie Selway, head of the SEC's trading division, highlighted the increased flexibility and operational efficiency this decision brings to the entire ETF ecosystem. Further innovation is anticipated, as evidenced by Nasdaq's recent application to allow staking within Ethereum ETFs.
Beyond in-kind redemptions, the SEC also approved a substantial expansion of options trading for Bitcoin ETFs. Position limits have been increased tenfold, from 25,000 to 250,000 contracts. Industry analysts, such as Bloomberg's Eric Balchunas, anticipate this will act as a potent catalyst for accelerated growth within the cryptocurrency derivatives market, particularly for option-based products. These changes, effective immediately, are setting a precedent, fueling optimism for similar regulatory approvals for future altcoin ETFs. Bloomberg's James Seyffart predicts that in-kind redemption mechanisms will become the standard for upcoming crypto ETF launches.
The SEC's evolving approach is widely viewed as a direct response to persistent calls for equitable treatment of digital assets within the existing U.S. financial regulatory framework. The sentiment is best summarized by Nate Geraci, President of ETF Store, who declared, "It's a new day at the SEC." This significant regulatory shift marks a turning point for the cryptocurrency industry in the United States, signaling a more accommodating and forward-looking regulatory environment.
