Bitwise Adds In-Kind Redemptions to Dogecoin and Aptos ETFs

Bitwise has updated its proposed exchange-traded funds (ETFs) for Dogecoin (DOGE) and Aptos (APT) to include in-kind redemptions, according to filings made on Thursday. This move comes as discussions around altcoin ETFs and their redemption structures gain momentum with US regulators. In-kind redemptions allow investors to exchange ETF shares directly for the underlying tokens, a mechanism that is considered more tax-efficient and appealing to a wide range of investors, from institutional to retail.

In February, the US Securities and Exchange Commission (SEC) sought comments on a proposal to allow in-kind creations and redemptions for spot Bitcoin (BTC) and Ether (ETH) ETFs. During a panel at the Bitcoin Policy Institute on Wednesday, US Securities and Exchange (SEC) Commissioner Hester Pierce indicated that in-kind redemptions for crypto ETFs are on the horizon. This development suggests a growing acceptance of in-kind redemption structures within the regulatory framework, which could pave the way for similar approvals in the future.

Bitwise first proposed its Dogecoin (DOGE) and Aptos (APT) ETFs earlier this year, with SEC filings submitted in January and March, respectively. Amendments to ETF filings are a standard part of the vetting process, allowing entities to respond to SEC feedback by altering the fund structure, mechanics, and disclosures. Solomon Tesfaye, head of capital markets at Aptos Labs, highlighted the significance of ETF access for Aptos and other Layer 1 (L1) blockchains, stating that it would be a "game-changer" by injecting significant capital, enhancing liquidity, and providing regulatory validation that institutions need.

Dogecoin, created by software engineers Billy Markus and Jackson Palmer, is the eighth-largest cryptocurrency by market capitalization. It runs on its own blockchain and is considered a popular memecoin. Aptos, the native token of a blockchain created by former Meta engineers, is the 32nd-largest cryptocurrency. The inclusion of in-kind redemptions in Bitwise's ETF filings for DOGE and APT reflects a strategic move to align with regulatory preferences and enhance the appeal of these ETFs to a broader investor base.

As of April 21, more than 70 cryptocurrency ETFs were awaiting SEC review, with assets in funds’ baskets ranging from governance tokens to memecoins and derivatives. The rise in altcoin ETF filings is driven by the SEC's revamped approach to the crypto industry. At least 31 altcoin ETF applications have been filed in the first half of 2025, indicating a growing interest in diversifying investment options within the cryptocurrency space. However, critics argue that crypto ETFs centralize what was meant to be decentralized and undermine financial empowerment.