SEC Considers In-Kind Creation and Redemption for Bitcoin ETFs to Enhance Efficiency and Reduce Costs
Main Idea
The SEC has approved in-kind creation and redemption for Bitcoin and Ether ETFs, allowing shares to be exchanged directly for underlying crypto assets, improving market efficiency and lowering costs.
Key Points
1. In-kind mechanisms allow ETF issuers and investors to avoid selling assets on the open market, reducing costs and improving efficiency.
2. SEC Chairman Paul Atkins stated that this approach makes crypto ETPs 'less costly and more efficient,' while Jamie Selway highlighted flexibility and cost savings.
3. The regulatory shift aligns with a broader pro-crypto policy movement, with US spot Bitcoin ETFs reporting $6.6 billion in inflows over 12 consecutive days.
4. BlackRock’s iShares Ethereum ETF surpassed $10 billion in assets in just 251 days, reflecting strong demand for crypto ETFs.
5. The SEC’s approval aims to create a more efficient and cost-effective environment for crypto ETFs, enhancing transparency and trust in the market.
Description
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