The U.S. Securities and Exchange Commission has granted approval for in-kind creation and redemption mechanisms across crypto exchange-traded products, marking a substantial shift in how these funds operate. This regulatory change enables authorized participants to trade cryptocurrency assets directly rather than relying solely on cash-based transactions, which could streamline operations and reduce costs for fund managers.
Enhanced Operations for Bitcoin and Ethereum ETFs
The SEC’s new framework applies to current Bitcoin and Ethereum ETFs trading on major exchanges including Nasdaq, NYSE, and CBOE. Fund managers can now handle asset creation with greater efficiency while minimizing trading expenses and market disruption during significant capital movements. This operational flexibility brings crypto ETFs closer to the structure used by traditional commodity funds like those tracking gold.
Chairman Paul Atkins highlighted this development as part of a comprehensive regulatory approach to digital assets. The Commission has simultaneously approved additional options trading and raised position limits for Bitcoin-based ETFs, while also permitting mixed spot Bitcoin and Ethereum products. These combined measures indicate a more accommodating regulatory environment compared to previous administration policies.
XRP ETF Prospects Strengthened by New Framework
Attorney Bill Morgan characterized the in-kind approval as a major advancement for cryptocurrency ETFs, particularly benefiting pending XRP ETF applications. Given that XRP has achieved legal clarity through recent court decisions, the new creation and redemption structure could enhance operational efficiency for potential XRP funds. While the SEC has not yet approved any XRP ETF proposals, this framework establishes favorable groundwork.
⚠️ JUST IN:
THE PROSHARES #XRP FUTURES ETFs HAVE RECEIVED THE GREEN LIGHT FROM THE SEC!
10X HOLDINGS CEO DAN TAPIERO EMPHASIZES HIS RESPECT FOR XRP's FUTURE VIABILTY! 🙌🏼 pic.twitter.com/YnYt3BkGdv
— 𝓐𝓶𝓮𝓵𝓲𝓮 (@_Crypto_Barbie) April 30, 2025
Multiple XRP ETF applications currently remain under SEC evaluation, with analysts anticipating potential decisions by October. SEC Commissioner Hester Peirce acknowledged processing delays but confirmed that review procedures continue following established regulatory standards. The Commission has neither approved nor rejected the pending XRP ETF filings, leaving approval possibilities open.
Under Chairman Atkins’ leadership, the SEC has implemented a merit-neutral approach toward cryptocurrency products. Jamie Selway, Director of Trading and Markets, confirmed this policy aims to promote efficiency throughout digital asset markets. The alignment of XRP ETF frameworks with already-approved Bitcoin and Ethereum structures strengthens the foundation for future altcoin ETF development and provides clearer pathways for regulatory acceptance.
Broader Market Implications
The SEC’s approval of in-kind mechanisms represents a measured step toward normalizing crypto ETF operations within existing regulatory frameworks. This development may provide modest support for institutional adoption of cryptocurrency products while establishing clearer operational standards across the digital asset space.
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