The Securities and Exchange Commission announced Wednesday that U.S. investors can now conduct in-kind redemptions for all Bitcoin and Ethereum exchange-traded funds, bringing these products closer in line with traditional commodity ETFs.
Although the Wall Street regulator never explicitly prohibited in-kind redemptions, ETF sponsors had been directed to exclude them from their initial filings. The spot BTC and ETH ETFs that received approval from the regulator last year were restricted to cash-only creations and redemptions, preventing investors from directly swapping ETF shares for the underlying cryptocurrency assets.
Under the new arrangement, authorized participants can now deliver or receive Bitcoin and Ether directly when creating or redeeming shares. This structure offers greater efficiency and lower costs since issuers won’t be forced to sell tokens through market makers and deliver cash instead.
JUST IN: 🇺🇸 SEC approves 'In-Kind redemptions' for Bitcoin and Ethereum ETFs
This means large institutions or market makers can redeem their ETF shares for actual $BTC or $ETH pic.twitter.com/M7oVkhDd0O
— BlockNews (@blocknewsdotcom) July 29, 2025
New Leadership Signals Policy Shift
“It’s a new day at the SEC,” Chairman Paul Atkins stated. “A key priority of my chairmanship is developing a fit-for-purpose regulatory framework for crypto asset markets. Investors will benefit from these approvals, as they will make these products less costly and more efficient.”
The change represents part of a broader industry movement toward more crypto-friendly policies, largely influenced by the Trump administration’s pledge to support the developing sector.
Industry Experts Anticipate Further Approvals
Bloomberg ETF analyst Eric Balchunas observed on X that the SEC’s “order granting accelerated approval” signals a wider wave of ETF approvals may be coming. Balchunas now expects additional approvals could arrive by early fall.
Fellow analyst James Seyffart suggested the in-kind redemption approval establishes precedent for future developments, indicating that upcoming exchange-traded funds tracking other digital assets will probably include in-kind creation and redemption capabilities from launch. “More movement in right direction IMO,” Seyffart commented.
Market Response Outlook
This regulatory development could provide moderate support for Bitcoin and Ethereum prices as improved ETF efficiency may attract additional institutional interest. The policy shift represents incremental progress toward mainstream crypto adoption, though immediate price impacts may remain limited.
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