InKind – Earlybirds Invest https://earlybirdsinvest.com Latest Crypto News Tue, 29 Jul 2025 21:50:57 +0000 en-US hourly 1 https://wordpress.org/?v=6.9.8 https://i0.wp.com/earlybirdsinvest.com/wp-content/uploads/2024/12/cropped-New-Project-2024-12-17T235703.455.png?fit=32%2C32&ssl=1 InKind – Earlybirds Invest https://earlybirdsinvest.com 32 32 240146708 SEC approves in‑kind redemptions for spot Bitcoin and Ethereum ETFs https://earlybirdsinvest.com/sec-approves-in%e2%80%91kind-redemptions-for-spot-bitcoin-and-ethereum-etfs/ https://earlybirdsinvest.com/sec-approves-in%e2%80%91kind-redemptions-for-spot-bitcoin-and-ethereum-etfs/#respond Tue, 29 Jul 2025 21:50:56 +0000 https://earlybirdsinvest.com/sec-approves-in%e2%80%91kind-redemptions-for-spot-bitcoin-and-ethereum-etfs/

The Securities and Exchange Commission (SEC) approved orders allowing authorized participants to create and redeem shares of spot Bitcoin (BTC) and Ethereum (ETH) exchange‑traded products (ETP) in kind.

According to a July 29 statement, the agency framed the move as aligning crypto funds with standard practice in commodity‑based ETPs. Additionally, it said the change should reduce costs and improve market efficiency.

Chairman Paul Atkins said in a statement:

“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. Investors will benefit from these approvals, as they will make these products less costly and more efficient.” 

Jamie Selway, who leads the Division of Trading and Markets, called the decision “an important development” that adds flexibility for issuers and authorized participants.

The Commission also advanced a broader slate of measures by approving exchange applications to list a mixed spot Bitcoin‑and‑Ether ETP, options on certain spot Bitcoin ETPs, FLEX options on shares of some BTC‑based ETPs, and an increase in position limits up to the generic 250,000‑contract cap for listed options on certain BTC ETPs. 

In addition, the SEC issued scheduling orders seeking comment regarding delegated approvals for two large‑cap crypto‑based ETPs.

The move follows Cboe amendments to these products on July 22, deemed by ETF analysts as a positive sign.

What in‑kind means

Under the new orders, authorized participants (APs) can deliver or receive BTC or ETH when creating or redeeming ETF shares. APs are typically large trading firms and banks. 

For most investors, trading will look the same, as the shares will still change hands on exchanges and track net asset value closely. As a result, the shift is structural, allowing APs to move crypto directly rather than sourcing or unwinding large cash positions. 

This enables funds to lower frictions, tighten spreads, and manage baskets more efficiently, especially in volatile markets.

Bloomberg’s Eric Balchunas wrote on X that the agency “just approved in‑kind creation/redemption for all spot bitcoin and ether ETFs,” adding that an “order granting accelerated approval” signals more decisions to come, potentially by early fall. 

James Seyffart predicted future altcoin ETFs would likely launch with in‑kind from the start, which he called “more movement in the right direction.”

Mentioned in this article
]]> https://earlybirdsinvest.com/sec-approves-in%e2%80%91kind-redemptions-for-spot-bitcoin-and-ethereum-etfs/feed/ 0 50383 In-kind redemption for Bitcoin and Ethereum ETFs get ‘positive sign’ as Cboe’s files amendments https://earlybirdsinvest.com/in-kind-redemption-for-bitcoin-and-ethereum-etfs-get-positive-sign-as-cboes-files-amendments/ https://earlybirdsinvest.com/in-kind-redemption-for-bitcoin-and-ethereum-etfs-get-positive-sign-as-cboes-files-amendments/#respond Wed, 23 Jul 2025 03:25:01 +0000 https://earlybirdsinvest.com/in-kind-redemption-for-bitcoin-and-ethereum-etfs-get-positive-sign-as-cboes-files-amendments/

Cboe has submitted amendments for five crypto-related exchange-traded funds (ETFs) that would allow authorized participants to create and redeem shares in-kind, which is a positive sign for the approval of such funds.

Bloomberg ETF analyst James Seyffart shared on July 22 a screenshot of the exchanges’ docket showing the amended rule filings. The amendments relate to issuers ARK 21Shares, VanEck, Fidelity, WisdomTree, and Invesco Galaxy.

Seyffart described the cluster of filings as a “positive” signal that the Securities and Exchange Commission (SEC) is working with issuers to finalize an in-kind framework rather than resisting it. He characterized the process as fine-tuning, not stonewalling.

In-kind redemptions enable investors to exchange Bitcoin (BTC) or Ethereum (ETH) for the underlying assets, rather than cash, and receive them upon redemption.

Not noticeable by the retail

Seyffart also addressed a recurring misconception. The shift to in-kind would not let retail investors swap ETF shares for Bitcoin or Ethereum directly. 

Only authorized participants, such as large Wall Street firms and market makers, would be responsible for handling those transfers. For most investors, nothing will appear different on the screen because existing spot Bitcoin ETFs already trade closely to their net asset value.

The benefit is then structural, as crypto ETPs would be treated the same way as commodity and equity products that commonly use in-kind flows, enhancing tax efficiency and lowering friction inside the fund.

If the Commission signs off, authorized participants will be able to move crypto directly instead of sourcing or unwinding large cash positions each time they create or redeem baskets. 

That change could reduce spreads and hedging costs, especially in volatile markets, and give issuers more flexibility in portfolio management. 

Although retail wouldn’t notice the changes directly, smoother primary-market plumbing tends to reinforce secondary-market efficiency.

Long queue

The latest Cboe batch joins a growing queue of filings that either request or contemplate in-kind flexibility. 

Nasdaq has already requested that BlackRock’s iShares Bitcoin Trust be converted to in-kind creations and redemptions, following language in the trust’s January 2024 S-1 that stated the sponsor could make the switch once regulators approved. 

A Federal Register notice in late May also described full in-kind mechanics for an Ethereum trust on Nasdaq, detailing how APs would deliver or receive ether. 

NYSE Arca hosts Bitwise’s Bitcoin and Ethereum ETFs, which from the outset proposed pure in-kind baskets. 

Collectively, these filings form the pending docket the SEC must clear before any fund can move away from the cash-only model imposed at launch.

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]]> https://earlybirdsinvest.com/in-kind-redemption-for-bitcoin-and-ethereum-etfs-get-positive-sign-as-cboes-files-amendments/feed/ 0 49135 SEC delays in-kind redemption decision for Bitwise crypto ETFs https://earlybirdsinvest.com/sec-delays-in-kind-redemption-decision-for-bitwise-crypto-etfs/ https://earlybirdsinvest.com/sec-delays-in-kind-redemption-decision-for-bitwise-crypto-etfs/#respond Thu, 17 Jul 2025 13:15:17 +0000 https://earlybirdsinvest.com/sec-delays-in-kind-redemption-decision-for-bitwise-crypto-etfs/

The United States Securities and Exchange Commission (SEC) extended its deadline for ruling on in-kind redemptions for two separate crypto exchange-traded funds (ETFs).

According to a Wednesday SEC filing, the regulator will take more time to decide whether to allow in-kind redemptions on NYSE Arca for Bitwise’s Bitcoin (BTC) and Ether (ETH) spot ETFs. The time limit for the decision was extended, but the underlying limit remains “45 days, extendable to no more than 90.”

“The Commission finds it appropriate to designate a longer period within which to take action on the proposed rule change so that it has sufficient time to consider the proposed rule change, and the issues raised therein,” the announcement read.

In-kind redemptions would allow investors to redeem ETFs for the underlying assets directly, in this case, Bitcoin or Ether.

This could have tax implications, as assets would be redeemed in-kind rather than liquidated for cash.

SEC’s deadline extension filing. Source: SEC

Related: US regulator considers simplified path to market for crypto ETFs

SEC accused of foot-dragging

This deadline extension is far from the first one by the SEC when it comes to crypto-relevant decisions. Earlier this month, attorneys for digital asset manager Grayscale pushed back against the US SEC’s delay in approving its Digital Large Cap ETF.

The SEC had previously approved the product, but the regulator’s Office of the Secretary decided to review the action shortly thereafter and halted the decision. According to Grayscale’s attorneys, this violated the “statutory approval or disapproval deadline” and conflicted with established procedure.

Related: First US staking ETF to launch Wednesday, giving investors exposure to Solana

SEC changes approach to crypto

Despite the ongoing conflicts, most agree that since the Trump administration took power in Washington and SEC Chair Paul Atkins assumed the position previously held by Gary Gensler, the regulator’s stance toward crypto has changed significantly.

Earlier this month, Atkins said that the regulator now sees tokenization as an “innovation” to be encouraged in the marketplace. He also highlighted how his approach differs from his predecessor’s, noting that the SEC had previously hindered innovation through vague laws and “regulation through enforcement,” before adding:

“That day is over.”

Atkins said that his goal when it comes to crypto rules is regulatory transparency and establishing a foundation that allows for innovation and new products.

Magazine: SEC’s U-turn on crypto leaves key questions unanswered

]]> https://earlybirdsinvest.com/sec-delays-in-kind-redemption-decision-for-bitwise-crypto-etfs/feed/ 0 48145 SEC Delays Decisions on In-Kind Redemptions, Ether ETF Staking https://earlybirdsinvest.com/sec-delays-decisions-on-in-kind-redemptions-ether-etf-staking/ https://earlybirdsinvest.com/sec-delays-decisions-on-in-kind-redemptions-ether-etf-staking/#respond Mon, 14 Apr 2025 21:59:36 +0000 https://earlybirdsinvest.com/sec-delays-decisions-on-in-kind-redemptions-ether-etf-staking/

The Securities and Exchange Commission (SEC) is not yet ready to make a decision on two critical features that issuers of the spot crypto exchange-traded funds (ETFs) are hoping to add to their products.

The regulator delayed a decision on whether it will allow in-kind redemptions for WisdomTree’s Bitcoin Fund (BTCW) and VanEck’s Bitcoin Fund (BITB) and Ethereum Fund (ETHW) on Monday. It also moved its deadline for a decision in regards to a proposal by Grayscale to allow staking its Ethereum Trust (ETHE) and Mini Ethereum Trust (ETH), which the asset manager’s exchange, NYSE Arca had requested in February.

Cboe, the exchange that is associated with five of the other issuers of an ether ETF, including Fidelity, Franklin Templeton, VanEck and Invesco/Galaxy, submitted its amended filing in March for the Fidelity Ethereum Fund (FETH) and the Franklin Ethereum ETF (EZET).

The SEC has not previously allowed staking in spot ether ETFs. But with the appointment of new SEC Chair Paul Atkins, who was confirmed by the Senate last week, things could change quickly.

Several other jurisdictions, including Hong Kong, Canada and Europe, have already green-lighted staking for ETFs, but that doesn’t put much pressure on the SEC, said one expert.

“The SEC will take their time and move as fast or as slow as they want,” said James Seyffart, ETF analyst at Bloomberg Intelligence. “They don’t care what other regulators are doing in my experience, they might learn from them but I don’t think a regulator approving something is going to make the SEC jump through hoops and catch up. They’ll go at their own pace.”

The regulator now has until June 3rd to make a decision on in-kind redemptions on Bitwise’s and WisdomTree’s products and June 1st to decide on Grayscale’s staking proposal.

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