Bitwise Updates Dogecoin ETF Application With In-Kind Redemptions

Bitwise, a prominent asset manager, has submitted an updated application for a U.S.-listed spot Dogecoin (DOGE) exchange-traded fund (ETF). This move is seen as a significant step towards potential approval by the Securities and Exchange Commission (SEC). The updated filing includes in-kind creations and redemptions, a feature that was absent in the initial application. This addition is considered a positive indicator of the SEC's engagement and a step closer to approval.

According to industry analysts, the inclusion of in-kind redemptions, where broker-dealers can directly trade shares for DOGE tokens instead of cash, is a crucial development. This method is seen as more tax-efficient compared to the current practice of exchanging tokens for cash and then swapping for shares or vice versa. Bitwise was the first company to file for a DOGE ETF in January, and other asset managers, including Grayscale and 21Shares, have also submitted applications for similar funds.

The updated filing comes at a time when the SEC, under the new leadership, has shown a more lenient approach towards cryptocurrencies. This shift in policy has encouraged companies to seek approval for various crypto ETFs, including those tracking Ripple-affiliated XRP, Solana’s SOL, and even Official Trump. The SEC's recent actions and statements suggest a high likelihood of approving these spot crypto ETF filings in the near future.

During a panel discussion at the Bitcoin Policy Institute, SEC Commissioner Hester Pierce indicated that in-kind redemptions for crypto ETFs are "certainly on the horizon." This statement aligns with the industry's expectations and the recent amendments made by Bitwise. The updated filing by Bitwise is seen as a positive development for the broader crypto ETF market, as it sets a precedent for other asset managers seeking similar approvals.

In summary, Bitwise's updated application for a spot Dogecoin ETF, which includes in-kind creations and redemptions, is a significant development in the crypto ETF landscape. The SEC's more lenient approach towards cryptocurrencies and the positive statements from industry leaders suggest a high likelihood of approval for this and other spot crypto ETF filings. This move by Bitwise is expected to pave the way for other asset managers seeking similar approvals and could potentially lead to a more tax-efficient and streamlined process for crypto ETFs in the U.S. market.