The U.S. Securities and Exchange Commission (SEC) approved the use of in-kind creation and redemption processes for all spot Bitcoin and Ethereum exchange-traded funds (ETFs). This move enables authorized participants, who are large institutional investors, to create and redeem ETF shares directly in BTC or ETH, eliminating the need to use cash. This is expected to enhance efficiency and security for institutional investors, allowing for better alignment with investor demand without requiring conversions to fiat currency. The change comes under newly appointed SEC Chair Paul Atkins, who is known for his pro-market stance and aims to foster a more open regulatory environment for digital assets. The decision follows BlackRock's earlier request for in-kind transactions for its iShares Bitcoin Trust. Additionally, the SEC raised position limits for options trading on the IBIT, indicating increased comfort with the Bitcoin ETF market.

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