30.07.2025 00:58
The Securities and Exchange Commission (SEC) has dramatically altered the landscape of cryptocurrency exchange-traded funds (ETFs) with a landmark decision. The agency approved in-kind ETFs for both Bitcoin and Ethereum, a move that significantly reduces barriers to entry for these digital assets and represents a considerable leap forward for the cryptocurrency market. This approval also includes a streamlined approval process for future altcoin ETF applications.
Further bolstering the crypto market's potential, the SEC concurrently increased the position limit on Bitcoin options trading by a factor of ten. This substantial increase is predicted to fuel a surge in the popularity of option-based Bitcoin ETFs, greatly expanding investment opportunities. The changes, announced by SEC Chairman Paul Atkins, follow years of advocacy for more crypto-friendly regulations.
Atkins' statement emphasized the SEC's commitment to creating a robust and rational regulatory environment for crypto assets. He highlighted the approval of in-kind creations and redemptions for crypto exchange-traded products (ETPs) as a crucial step towards a deeper, more dynamic market benefiting all American investors. The approval marks a significant shift in regulatory approach, fostering greater accessibility and market efficiency.
Previously, Bitcoin ETF approvals under the previous administration mandated issuers to purchase Bitcoin directly, creating a bottleneck and increased costs. The newly approved in-kind model allows investors to contribute their own cryptocurrency holdings directly to the ETF issuer in exchange for ETF shares, simplifying the process and reducing the financial burden on issuers. This reverse process also applies to redemptions, providing investors with a more flexible and efficient mechanism for participating in the market. In essence, the in-kind system aligns cryptocurrency ETFs more closely with the established practices for commodity ETFs.
The SEC's decision has been met with widespread approval across the cryptocurrency community. This positive reception reflects the considerable advantages of in-kind ETFs in streamlining the investment process, lowering costs, and further integrating crypto assets into the broader financial system. While the SEC did not offer blanket approval for all future ETF applications, the expedited review process and the clear approval of in-kind mechanisms signal a more accommodating regulatory stance towards the growing cryptocurrency sector, sourced from internet reports.
