SEC Reviews Possible In-Kind Creations for Bitcoin ETPs, Indicating Potential Market Efficiency Shift

Key Points

1. The SEC's proposal involves permitting in-kind creations and redemptions, which allows direct exchange of crypto assets instead of cash, reducing costs and tracking errors.

2. This shift from cash-only to in-kind mechanisms is seen as necessary to address inefficiencies in crypto ETPs and align them with traditional ETF market practices.

3. Industry experts, such as James Seyffart from Bloomberg Intelligence, view the SEC's move positively, suggesting it could enhance ETF efficiency and institutional engagement.

4. The initiative involves firms like Fidelity and VanEck, indicating potential adaptations to ETF structures to better suit digital assets.

5. Market analysts believe the SEC's review could improve liquidity, reduce tracking errors, and foster broader adoption of crypto ETFs.