Bitcoin News Today: SEC Approves In-Kind Crypto ETP Creation Boosting Institutional Efficiency

The U.S. Securities and Exchange Commission’s (SEC) recent approval of in-kind creation and redemption mechanisms for crypto exchange-traded products (ETPs) has been characterized by analysts as a structural enhancement rather than a retail market revolution. This change allows institutional asset managers to exchange crypto tokens directly for ETP shares, bypassing the need for cash transactions. The shift is expected to reduce conversion costs, improve price accuracy, and increase operational efficiency [3].

Eric Balchunas, a senior ETF analyst at Bloomberg, described the adjustment as a “plumbing fix,” emphasizing that it does not alter how retail investors access crypto ETPs, such as IBIT or similar products. Instead, it marks the SEC’s willingness to treat cryptocurrency as a legitimate asset class, aligning it with traditional financial instruments [1]. This development is particularly significant for institutional investors, as it facilitates deeper integration between digital assets and conventional financial markets [3].

Bitwise Asset Management was the first to implement the new structure, announcing on Thursday that its Bitcoin and Ether ETFs would now allow in-kind creation and redemption. This move follows the SEC’s July 29 ruling and reflects broader industry adoption of the updated framework. Bitwise President Teddy Fusaro noted that the ruling brings crypto funds to the same operational foundation used by traditional ETFs, enhancing transparency and efficiency [3].

The approval comes at a time of rapid accumulation of Bitcoin by U.S. ETFs. According to data from Bitbo, the 12 U.S. Bitcoin ETFs currently hold 1,299,401 BTC, representing 6.18% of the total 21 million Bitcoin supply. The iShares Bitcoin Trust, managed by BlackRock, leads with 740,601 BTC, valued at $87.66 billion. The Fidelity Wise Origin Bitcoin Fund follows with 205,864.2 BTC, valued at approximately $24.37 billion, while the Bitwise Bitcoin ETF holds 40,638.7 BTC, worth $4.81 billion [3].

Industry observers also suggest that the SEC’s updated stance could ease the regulatory path for other crypto ETPs, such as those based on XRP. Legal expert Bill Morgan noted that the revised regulatory approach could reduce uncertainty for pending applications, potentially accelerating approval timelines [1]. Meanwhile, the Chicago Board Options Exchange (CBOE) has filed for a rule change to streamline the listing of crypto ETFs, signaling institutional recognition of the growing importance of digital assets [2].

Despite the regulatory progress, analysts caution that the ruling does not represent a major shift for retail investors. The market response has been cautiously positive, with many viewing the changes as part of a broader effort to create a clearer and more mature regulatory environment for crypto products. The SEC’s continued deliberation on the Grayscale Solana ETF, with a new deadline set for October 10, underscores the agency’s measured approach to new product approvals [6].

Overall, the SEC’s recent regulatory move is seen as a foundational step toward institutional adoption of crypto ETPs. While retail dynamics remain largely unchanged for now, the structural adjustments could lead to more stable and transparent market conditions in the long term.

Sources:

[1] https://www.facebook.com/photo.php?fbid=733071479606063&set=a.130****63246274&type=3

[2] https://www.facebook.com/manuel.guevarra.369210/posts/cboe-files-for-rule-change-to-list-crypto-etfs-without-sec-approvalcboe-has-file/733075989605612/

[3] https://mx.advfn.com/bolsa-de-valores/COIN/BTCUSD/crypto-news/96530865/crypto-class-actions-on-pace-to-nearly-double-in-2

[6] https://coinpedia.org/crypto-live-news/