SEC Finally Approves In-kind Creations and Redemptions for Spot Crypto ETFs
Main Idea
The SEC approved in-kind creations and redemptions for crypto asset ETFs, which reduces costs and improves market efficiency, with industry experts anticipating further approvals like staking for crypto ETFs.
Key Points
1. The SEC approved orders allowing in-kind creations and redemptions for crypto asset ETFs, using actual underlying assets (BTC and ETH) instead of cash.
2. This new method eliminates trading fees and reduces bid-ask spreads, keeping ETF prices closer to the actual asset prices.
3. SEC Chairman Paul Atkins and Jamie Selway highlighted the benefits of reduced costs, increased efficiency, and market flexibility for investors and issuers.
4. Industry experts, including Eric Balchunas and Nate Geraci, noted the approval as a long-awaited improvement and anticipate staking as the next approval for crypto ETFs.
5. Spot Ether ETFs have seen 18 consecutive days of inflows, totaling $5.4 billion in new capital.
Description
On Tuesday, the SEC approved orders to permit in-kind creations and redemptions by authorized participants for crypto asset ETFs. The orders approved “reflect a departure from recently approved spot Bitcoin and Ether ETPs, which were limited to creations and redemptions on an in-cash basis,” the Commission stated . With today’s approval orders, crypto ETFs will be permitted to create and redeem shares on an in-kind basis. Looks like SEC just approved in-kind creation / redemption for all spot bi...
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