Bitcoin News Today: SEC approves in-kind redemption for Bitcoin and Ethereum ETFs

The U.S. Securities and Exchange Commission has approved in-kind creation and redemption mechanisms for spot Bitcoin and Ethereum exchange-traded funds, marking a pivotal shift in regulatory policy toward digital assets. This change, effective in late July 2025, allows institutional investors and authorized participants to exchange ETF shares directly for the underlying cryptocurrencies without converting them into cash first. Key issuers such as BlackRock and Fidelity have received approval to implement these mechanisms, aligning crypto ETFs with traditional commodity ETFs in terms of structure and functionality [1].

The in-kind redemption model is expected to enhance market efficiency by reducing transaction costs and improving liquidity. Previously, redemptions were limited to cash-based processes, which could create delays and liquidity bottlenecks. With the new policy, ETF participants can now engage in more seamless and cost-effective trading, potentially narrowing the gap between ETF prices and the net asset value of the underlying assets [2].

Paul S. Atkins, SEC Chairman, highlighted the significance of the decision, describing it as a key step in developing a modern regulatory framework for crypto markets. “It’s a new day at the SEC,” he stated, emphasizing that the reforms will make crypto ETFs “less costly and more efficient” for investors [3].

The move also reflects broader institutional adoption of crypto. Bitwise became the first U.S. ETF issuer to implement in-kind redemptions following the approval, signaling confidence in the new structure. Industry observers have praised the decision as a step toward mainstream acceptance of crypto assets, with analysts predicting that future ETFs will adopt in-kind processes from their inception [4].

Market analysts suggest that the approval may also benefit the banking sector by improving the transparency and efficiency of crypto-related exposures. Additionally, the policy sets a precedent for the potential approval of in-kind mechanisms for other major cryptocurrencies, with estimates indicating that a dozen additional tokens could qualify for similar structures by October 2025 [5].

The regulatory evolution underscores the SEC’s ongoing efforts to integrate digital assets into traditional financial systems. By aligning crypto ETFs with well-established commodity fund mechanics, the agency is signaling greater regulatory acceptance and a more structured approach to crypto market oversight [6].

Source:

[1] CoinMarketCap, [https://coinmarketcap.com/community/articles/688bcd8f37af8a5e9f9d58cb/](https://coinmarketcap.com/community/articles/688bcd8f37af8a5e9f9d58cb/)

[2] Cointelegraph, [https://cointelegraph.com/news/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)

[3] CoinDesk, [https://www.coindesk.com/markets/2025/07/30/in-kind-bitcoin-and-ether-etfs-how-they-will-reshape-the-crypto-market](https://www.coindesk.com/markets/2025/07/30/in-kind-bitcoin-and-ether-etfs-how-they-will-reshape-the-crypto-market)

[4] ETF.com, [https://www.etf.com/sections/features/crypto-etfs-unstoppable-move-mainstream](https://www.etf.com/sections/features/crypto-etfs-unstoppable-move-mainstream)

[5] TradingView, [https://www.tradingview.com/news/cryptonews:4f708b3ea094b:0-sec-sets-new-crypto-etf-standards-dozen-major-tokens-could-qualify-by-october/](https://www.tradingview.com/news/cryptonews:4f708b3ea094b:0-sec-sets-new-crypto-etf-standards-dozen-major-tokens-could-qualify-by-october/)

[6] Ledger, [https://www.ledgerinsights.com/sec-allows-in-kind-crypto-etf-redemptions-impacting-bank-indirect-exposures/](https://www.ledgerinsights.com/sec-allows-in-kind-crypto-etf-redemptions-impacting-bank-indirect-exposures/)