Bitwise Updates Dogecoin Aptos ETFs With In-Kind Redemptions

Bitwise Asset Management has updated its proposed exchange-traded funds (ETFs) for Dogecoin (DOGE) and Aptos (APT) to include in-kind redemptions. This change, detailed in amended S-1 forms filed on Thursday, allows authorized participants to exchange shares directly for the underlying cryptocurrencies, potentially enhancing tax efficiency and reducing costs associated with cash-based creation and redemption processes.

This amendment is significant as it aligns with the evolving regulatory landscape and the growing acceptance of cryptocurrencies within traditional financial structures. The inclusion of in-kind redemptions suggests that the Securities and Exchange Commission (SEC) may be open to more flexible and efficient mechanisms for managing crypto ETFs, potentially paving the way for broader acceptance and integration of digital assets into mainstream investment portfolios.

Bitwise's move comes amid growing discussions with U.S. regulators on the future structure of altcoin funds and investor access to underlying assets. The mechanism of in-kind redemptions is seen as appealing to both retail and institutional participants, who view it as a way to reduce costs and improve liquidity. This change is particularly notable as it aligns with the evolving regulatory landscape and the growing acceptance of cryptocurrencies within traditional financial structures.

Earlier this year, the SEC opened comments on proposals to incorporate in-kind creations and redemptions for spot Bitcoin and Ether ETFs. During a recent panel, SEC Commissioner Hester Peirce suggested that in-kind redemptions for crypto ETFs could soon be approved, adding momentum to ETF issuers’ plans. Bitwise initially filed for its Dogecoin ETF in January and its Aptos ETF in March. Amendments to ETF proposals are a routine part of the regulatory process, allowing issuers to refine fund structures in line with SEC feedback.

Solomon Tesfaye, head of capital markets at Aptos Labs, emphasized the significance of ETF access for Aptos and similar Layer 1 networks. “ETF access would mark a major step forward in integrating Aptos and other L1s into traditional capital markets,” Tesfaye stated, calling it a potential “game-changer” for liquidity, capital inflows, and institutional validation.

Dogecoin, known for its memecoin origins and $24.1 billion market cap, continues to attract ETF interest, with Grayscale and 21Shares also filing to launch DOGE ETFs. Aptos, created by former Meta engineers, is the 32nd-largest cryptocurrency with a market capitalization of $2.85 billion and a 52-week high of $20.

The surge in altcoin ETF filings aligns with the SEC’s evolving stance, which has encouraged new applications. Over 70 crypto ETFs are awaiting SEC review, with at least 31 altcoin ETF applications filed in the first half of the year. While critics argue that crypto ETFs risk centralizing assets in a sector built on decentralization, the momentum signals strong market interest in bringing altcoins further into traditional financial markets.