The U.S. Securities and Exchange Commission has approved the use of in-kind creation and redemption for all spot Bitcoin and Ethereum ETFs, allowing institutional players to exchange BTC or ETH directly for ETF shares, bypassing the need for cash.
This change improves operational efficiency and reduces the friction and costs of fiat conversions, especially during volatile market conditions. It also allows ETF issuers to better align the number of ETF shares with investor demand in real-time.
This policy shift marks a significant regulatory milestone for the crypto industry and signals a more open stance from the SEC under new Chair Paul Atkins. Known for his market-friendly approach, Atkins has long supported innovation in financial products, especially in the digital asset space.
With this move, the SEC has taken its first major crypto-friendly action under his leadership, potentially paving the way for smoother institutional adoption of spot crypto ETFs.
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