On July 29, 2025, the U.S. Securities and Exchange Commission (SEC) approved in-kind processes for Bitcoin and Ethereum ETFs, marking a significant move in the regulation of cryptocurrency markets in the country.
What are In-Kind Processes for ETFs
In-kind processes involve the creation and redemption of ETF shares using assets rather than cash. This brings crypto ETFs closer to commodity ETF standards, such as gold, which is expected to enhance their efficiency and reduce costs.
Impact on Institutional Investors and the Market
The SEC's approval may have a significant impact on institutional market participants and the broader cryptocurrency sector. In-kind processes promise tangible benefits in cost reduction and operational efficiency, potentially resulting in financial inflows of around $710 billion.
Comments from SEC Leadership
According to Paul S. Atkins, the new SEC Chairman: "It's a new day at the SEC, and a key priority of my chairmanship is developing a fit-for-purpose regulatory framework for crypto asset markets. I am pleased the Commission approved these orders allowing for more efficient and cost-effective creation and redemption of crypto ETFs."
The SEC's approval of in-kind processes for crypto ETFs represents a crucial step toward market adaptation. This may lead to deeper integration and accessibility for investors, as well as increased institutional interest in cryptocurrencies.
