Positive Shift for Bitcoin and Ethereum ETFs

In a notable development, several ETF issuers have submitted amendments to the U.S. Securities and Exchange Commission (SEC) to allow in-kind creations and redemptions for their spot crypto funds. This move is seen by experts as a sign of increasing momentum at the SEC. Among the issuers are 21Shares, Fidelity, Franklin Templeton, Galaxy, VanEck, and WisdomTree, who filed their amended proposals on Tuesday, aiming to enhance the efficiency of their spot Bitcoin and Ethereum exchange-traded funds (ETFs), as well as future crypto ETFs. James Seyffart, an ETF analyst at Bloomberg Intelligence, remarked on X that these amendments represent "more positive signs." He believes it indicates beneficial movement and possible adjustments within the SEC. Efforts for in-kind redemptions have been ongoing for months, with SEC Commissioner Hester Peirce indicating last month that such redemptions are "on the horizon." Peirce noted, "Those (forms) are going through the process now," and added that significant interest exists regarding crypto ETF redemptions. However, Seyffart specified that in-kind trades would be limited to authorized participants, such as major Wall Street firms and market makers, and would not involve retail traders. He pointed out that most users will not notice significant changes, as current products in the market already trade efficiently. The incorporation of these redemptions would align crypto ETFs with the treatment of other exchange-traded products (ETPs). The SEC is also considering a quicker approval framework for crypto ETFs, which could open the floodgates for a wave of new applications. Following anticipated approvals for spot Bitcoin ETFs in January 2024 and spot Ethereum ETFs in July 2024, numerous additional crypto-related ETFs are now vying for SEC approval. Disclaimer: The Block is an independent media entity providing news and analysis. As of November 2023, Foresight Ventures holds a majority stake in The Block and invests in various companies within the crypto sector. This article serves informational purposes only and shouldn't be interpreted as legal or financial advice.