SEC May Enhance Market Efficiency by Allowing In-Kind Creation for Spot Bitcoin ETFs

Key Points

1. The SEC's approval allows spot Bitcoin ETFs to use in-kind creation and redemption, enabling direct transactions with Bitcoin or Ether instead of cash.

2. This change aligns crypto ETFs with traditional commodity-based exchange-traded products, improving market efficiency and flexibility.

3. In-kind creation reduces slippage, lowers fees, and enhances liquidity, making crypto ETFs more attractive to investors.

4. The SEC also approved other crypto-related products, including options and FLEX options linked to Bitcoin ETFs, and increased position limits for Bitcoin ETF options.

5. SEC Chair Paul S. Atkins emphasized that these approvals aim to create a more efficient and cost-effective market for crypto ETPs.