Overview

• The SEC replaced the cash-only creation and redemption process for spot Bitcoin and Ethereum ETFs with in-kind mechanisms.
• In-kind transfers provide tax advantages and enable sponsors to settle large token flows directly without converting crypto into cash.
• The commission also approved mixed Bitcoin-Ether ETPs, options and FLEX options on Bitcoin ETFs, and raised position limits to 250,000 contracts.
• Chair Paul Atkins described the update as part of a merit-neutral framework designed to reduce costs and deepen market liquidity for crypto products.
• Analysts say the shift clears the path for future altcoin ETFs to adopt in-kind settlement from their launch.