The U.S. Securities and Exchange Commission (SEC) has approved in-kind creations and redemptions for crypto exchange-traded products (ETPs), marking a significant regulatory change.
Regulatory Changes and Their Impact
The SEC has approved new procedures for crypto ETPs, allowing in-kind transactions and redemptions. This shift strengthens the analogy between crypto ETPs and traditional ETFs, moving away from a cash-only model. It is expected that this update will boost liquidity in Bitcoin and Ethereum, potentially lowering barriers for institutional investors. The SEC stated:
> "The Securities and Exchange Commission today voted to approve orders to permit in-kind creations and redemptions for crypto ETPs." (SEC, Press Release, 2025-101)
Historical Context and Future Implications
Previously, cash-only mandates limited ETP efficiency and market participation. The current step is a pioneering move in the U.S. that could mirror successes observed in Canada and the EU. It is expected that this will increase interest in Bitcoin and Ethereum markets, as well as impact Layer 2 solutions. Monitoring on-chain movements will be essential in clarifying broader market influences.
Expected Changes in the Cryptocurrency Market
With the introduction of in-kind operations, the DeFi market may attract more institutional investments, positively impacting overall liquidity. However, precise data on total value locked (TVL) or shifts in liquidity remain pending, requiring careful monitoring of incoming data.
The SEC's approval of in-kind procedures for crypto ETPs signals an important step towards the development of the cryptocurrency market. Significant changes in liquidity and institutional investor participation are anticipated, which could alter the structure of the crypto landscape in the future.
