SEC Approves In-Kind Redemptions, Raises Bitcoin ETF Options Limits

The U.S. Securities and Exchange Commission (SEC) has approved in-kind creations and redemptions for spot Bitcoin and Ethereum exchange-traded funds (ETFs), allowing authorized participants to directly transact crypto assets instead of cash. This change, announced under SEC Chair Paul S. Atkins, streamlines ETF operations, reducing costs, taxes, and trading inefficiencies for institutional investors, and aligns crypto ETFs with standard commodity ETF practices. Alongside this, the SEC increased position limits on Bitcoin ETF options and approved mixed spot Bitcoin and Ethereum funds, signaling a more flexible and crypto-friendly regulatory framework. These moves mark a significant policy shift under Chair Atkins' leadership, aiming to create a fit-for-purpose regulatory environment that fosters a deeper and more dynamic crypto market benefiting American investors. The approvals also include accelerated listings for major ETFs from firms like BlackRock, Fidelity, and VanEck, further integrating crypto into mainstream finance. Overall, the SEC's actions pave the way for more efficient trading, improved arbitrage, and potentially future altcoin-based ETFs with fewer hurdles.