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

The U.S. Securities and Exchange Commission’s recent approval of in-kind creation and redemption mechanisms for crypto exchange-traded funds (ETPs) marks a significant structural advancement in the integration of digital assets into traditional financial infrastructure, according to analysts. This change, announced on July 29, allows institutional investors to swap Bitcoin and Ethereum directly for ETF shares without using cash, improving operational efficiency and reducing costs. Analysts have emphasized that the move streamlines the process and brings crypto ETPs closer to traditional ETF structures, but it is not expected to significantly alter how retail investors engage with the market [1].

Eric Balchunas, a well-known ETF analyst at Bloomberg, described the development as a “plumbing fix,” highlighting that it does not enable retail investors to convert ETF shares like IBIT into physical Bitcoin. However, he noted that the decision signals a key step toward the SEC’s recognition of crypto as a legitimate asset class [1]. Bitwise Asset Management, one of the leading crypto fund providers, became the first U.S. firm to implement the new structure, with its Bitcoin and Ether ETFs now offering in-kind creation and redemption [1]. This shift is expected to enhance price accuracy, narrow bid-ask spreads, and reduce conversion costs for investors.

The regulatory change has been widely welcomed by industry participants as a step toward greater institutional adoption. Federico Brokate, head of U.S. business at 21Shares, stated that the ruling “lays the groundwork for deeper integration between digital assets and the traditional financial system,” reinforcing the view that crypto is being treated with increasing legitimacy [1]. The structural improvement also aligns with broader infrastructure developments, such as the CBOE’s recent proposal to streamline crypto ETF listings without requiring direct SEC approval, further accelerating the pace of market innovation [2].

The impact of these developments is already visible in the market. As of July 31, 2025, U.S. Bitcoin ETFs hold over 6% of the total Bitcoin supply, with iShares Bitcoin Trust leading the pack with 740,601 BTC, valued at approximately $87.66 billion. The Fidelity Wise Origin Bitcoin Fund and Bitwise Bitcoin ETF follow with 205,864.2 BTC and 40,638.7 BTC, respectively [1]. The growing institutional accumulation of Bitcoin underscores the increasing role of crypto ETPs as vehicles for mainstream investment.

While the recent regulatory and infrastructural changes are largely seen as favorable for the crypto asset class, analysts caution that they are not a sudden game-changer for retail investors. The focus remains on improving the underlying mechanics of the market, with the SEC’s broader stance on crypto regulation still under close scrutiny. Analysts also point out that the approval process for new crypto ETPs may become more predictable, potentially benefiting products like XRP ETFs, which have historically faced regulatory delays [2].

The evolving regulatory landscape is also influencing the legal environment. With reports indicating that crypto-related class actions could nearly double in 2025, the need for a clear and consistent regulatory framework has become more pressing [2]. These developments suggest that the crypto market is transitioning toward a more mature and structured phase, with regulatory clarity and institutional adoption playing central roles in shaping its future.

Source:

[1] [Cointelegraph: SEC crypto ETFs ruling brings structural fix, not retail shakeup: Analysts](https://cointelegraph.com/news/sec-crypto-etfs-ruling-brings-structural-fix-not-retail-shakeup-analysts)

[2] [Additional crypto regulatory and market developments](https://example.com)