‘It’s a new day’: SEC approves in-kind redemptions for spot Bitcoin, Ethereum ETFs
Main Idea
The U.S. SEC has approved in-kind creations and redemptions for spot crypto ETFs, which is expected to improve cost efficiency and tax benefits for investors.
Key Points
1. The SEC's approval allows authorized participants (APs), typically large institutions, to use in-kind creations and redemptions for spot crypto ETFs.
2. SEC Chair Paul Atkins stated that this move will make these products less costly and more efficient for investors.
3. The change applies to all current spot Bitcoin (BTC) and Ethereum (ETH) ETFs, as well as other approved crypto ETFs.
4. Bloomberg's Senior ETF Analyst Eric Balchunas noted that BlackRock's IBIT for physical BTC may see increased activity due to the new in-kind feature.
5. SEC Commissioner Hester Pierce welcomed the in-kind method, and Balchunas highlighted a 10X increase in the limit on BlackRock's iShares Bitcoin Trust ETF from 25K to 250K.
6. Spot BTC ETFs have seen an 80% drop in inflows recently, while ETH ETFs' market share has increased to 13%, though Balchunas projects ETH ETFs' growth may stall at 20%.
Description
A Bloomberg analyst stated that institutional investors will benefit more from the in-kind basis than retail.
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