Bitcoin News Today: SEC Unveils New Crypto ETP Listing Standards with In-Kind Redemption Rules

The U.S. Securities and Exchange Commission (SEC) has introduced a new set of listing standards for crypto-based exchange-traded products (ETPs), marking a key step in the institutionalization of digital assets. Effective in September or October 2025, the regulations specify that eligible cryptocurrencies must have at least six months of futures trading history on Coinbase’s derivatives exchange [1]. Bitcoin (BTC) and Ethereum (ETH), two of the largest crypto assets by market capitalization, meet these criteria, signaling their growing acceptance within traditional financial markets [2].

A core feature of the new standards is the approval of in-kind creation and redemption processes for ETPs. This allows investors and authorized participants to exchange baskets of the underlying cryptocurrency directly for ETP shares, eliminating the need for cash settlements and reducing intermediary costs [1]. The change is expected to enhance market efficiency and lower barriers for institutional participation. The SEC chair has emphasized that the approval reflects a commitment to developing a “fit-for-purpose” regulatory framework for crypto markets [2].

The shift in regulatory approach aligns with broader trends in the crypto market. Historical data shows that ETP approvals often lead to increased liquidity and trading volumes, as seen with Bitcoin and Ethereum’s gradual integration into traditional finance. At the time of the announcement, Bitcoin was trading at $118,306.15, with a market capitalization of $2.35 trillion and a 60.64% dominance in the crypto market [2]. Over the past 90 days, it had appreciated by 21.92%, reflecting sustained institutional and retail interest.

Industry stakeholders and analysts view the SEC’s move as a catalyst for significant ETP market growth. Experts from the Coincu research team suggest that the new framework could foster greater institutional interest while standardizing best practices in trading and custody [1]. Additionally, the regulatory clarity provided by the SEC’s decision may encourage more structured product development and broader adoption of crypto-based financial instruments.

Notably, other market players are also responding to the evolving landscape. Cboe, a major derivatives exchange operator, has submitted a proposed rule change to streamline crypto ETP approvals, further indicating the sector’s maturation [1]. Meanwhile, BlackRock has applied to stake an Ethereum spot ETP, a move that could further integrate crypto into the broader financial ecosystem [5]. However, the SEC has also paused certain applications, including those involving XRP, highlighting the agency’s cautious and case-by-case approach to approvals [8].

The new standards are expected to enhance regulatory alignment between crypto and traditional ETPs, such as those backed by gold or silver. This parity could help reduce arbitrage opportunities and improve price discovery for crypto assets. As the ETP market expands under a more defined regulatory regime, investors gain access to products with greater transparency and lower counterparty risks than unregulated crypto exchanges [6].

The SEC’s evolving approach to crypto ETPs reflects a balance between fostering innovation and safeguarding market integrity. With clearer guidelines now in place, the stage is set for a more systematic and scalable inclusion of digital assets in mainstream finance.

Sources:

[1] Cboe Pushes for Crypto ETF Revolution with SEC Rule

https://coincentral.com/cboe-pushes-for-crypto-etf-revolution-with-sec-rule-change-proposal/

[2] SEC Approves In-Kind Redemptions for All Spot Bitcoin

https://cryptoadventure.com/sec-approves-in-kind-redemptions-for-all-spot-bitcoin-and-ethereum-etfs

[5] BlackRock's Ethereum Spot ETF Staking Application

https://m.economictimes.com/crypto-news-today-live-29-jul-2025/liveblog/122959972.cms

[6] A Dozen Major Crypto Tokens Poised For SEC Approval

https://bitcoinworld.co.in/sec-crypto-approval-tokens/

[8] XRP price prediction - Is this Ripple alternative a better bet?

https://m.economictimes.com/wealth/invest/xrp-price-prediction-is-this-ripple-alternative-a-better-bet/amp_articleshow/122975676.cms