On July 30, 2025, the SEC approved in-kind creation and redemption for Bitcoin and Ethereum ETFs, marking a significant shift in U.S. crypto ETF regulations.
Changes in ETF Rules
The SEC has approved in-kind mechanisms for Bitcoin and Ethereum ETFs, allowing ETFs to settle using actual BTC and ETH instead of cash transactions, marking a change in regulatory approach.
Impact on the Crypto Market
The approval significantly impacts the crypto market by reducing fees and trading frictions for major ETFs. It enhances investor access and streamlines operations within the relevant markets. This is expected to expand institutional involvement and increase trading volumes.
Future of Altcoin ETFs
Analysts expect future altcoin ETFs to adopt similar in-kind rules. James Seyffart noted, 'Future altcoin ETFs will likely allow in-kind creation and redemption from the start.' This move aligns crypto ETFs closer to traditional commodity ETFs, benefiting overall market efficiency.
The SEC's approval may lead to increased ETF trading volumes and liquidity improvements. SEC Chairman Paul S. Atkins expressed confidence that these changes would make these products less costly and more efficient for investors.
