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19h ago

SEC Greenlights In-Kind Settlements for Bitcoin and Ethereum ETFs

The regulator’s order aligns these digital asset funds with commodity ETFs, enables direct crypto settlements, reduces trading costs, tightens spreads, supports large-cap ETP proposals

In kind bitcoin and ether etfs: how they will reshape the crypto market?
Sparks strike representation of cryptocurrency Bitcoin in this illustration taken November 24, 2024. REUTERS/Dado Ruvic/Illustration/File Photo
Sec approves in kind redemptions for all spot bitcoin and ethereum etfs
Source: SEC.gov

Overview

  • Authorized participants can now exchange shares of spot Bitcoin and Ethereum ETFs directly for BTC or ETH through in-kind creations and redemptions.
  • The approval covers all spot Bitcoin and Ethereum ETFs from major issuers such as BlackRock, Fidelity, Ark Invest and VanEck.
  • Position limits for options on Bitcoin ETFs have been raised to 250,000 contracts to enhance hedging flexibility and deepen liquidity.
  • The SEC has issued scheduling orders to seek public comment on proposed large-cap crypto ETP listings under its fit-for-purpose framework.
  • Analysts expect upcoming altcoin ETF filings to adopt in-kind mechanisms from launch, mirroring the efficiency gains in Bitcoin and Ethereum funds.