Recent comments from SEC Commissioner Hester Peirce about potential in-kind redemptions for Bitcoin ETFs have caught the attention of both investors and major financial institutions. These changes could significantly impact the structure of crypto ETFs.
Discussion of In-Kind Redemptions
At a panel focused on Bitcoin policy, Hester Peirce stated that the SEC is reviewing proposals to adopt in-kind redemptions for Bitcoin ETFs. She noted that this could lead to lower costs and reduced friction.
Potential Benefits and Support from Major Firms
Major financial institutions such as BlackRock and Fidelity are actively backing these changes, citing tax efficiency. Peirce emphasized that in-kind redemptions can reduce friction and costs for investors: "We feel that in-kind creations and redemptions reduce friction and costs for investors, both in terms of their impact on bid/ask."
Future of Crypto ETFs and Industry Growth
If approved, this mechanism could lead to increased investment in the crypto industry and attract institutional investors. Peirce also noted that such mechanisms may extend to other cryptocurrencies like Ethereum.
The growing interest in in-kind redemptions highlights the industry's push towards creating more efficient and investor-friendly ETFs. The SEC's decision on these proposals could significantly alter the future of crypto ETF products.
