Five major ETF issuers have filed amendments to include in-kind redemptions for their Bitcoin and Ethereum ETFs, marking a significant development in the industry.
How In-Kind Redemptions Could Change the ETF Market
According to Bloomberg analyst James Seyffart, in-kind redemptions would allow investors to exchange their ETF shares for the underlying cryptocurrencies like bitcoin or ether. This reduction in tax obligations and operational optimization significantly increases the attractiveness of crypto ETFs.
List of issuers: - Invesco Galaxy - Ark 21Shares - VanEck - WisdomTree - Fidelity
SEC Delays and Their Reasons
Despite encouraging signals, the SEC continues to delay the process. Recently, the regulator postponed a decision on BlackRock’s Ethereum ETF request. These delays are explained by complex technical issues related to the security of cryptocurrency management and risks associated with cyber attacks.
Prospects for Approval of Innovations
The success of implementing in-kind redemptions would signify an important regulatory turning point, allowing the emergence of a new type of crypto ETFs designed for institutional investors. The open question remains: is the SEC ready to take this step, or will it once again choose to delay?
The financial and technological aspects of implementing in-kind redemptions represent a significant challenge for the SEC, and the ongoing developments will attract the attention of investors.
