- The SEC now allows in-kind redemptions for Bitcoin and Ethereum ETFs, meaning investors can redeem shares for actual crypto, not just cash.
- The move is part of a broader pro-crypto regulatory shift, with recent bills and commentary signaling support for the industry.
- U.S. crypto ETFs—especially Bitcoin and Ether—are seeing major inflows, with Ethereum ETFs rapidly gaining traction.
Big shift just landed in U.S. crypto regulation land. The SEC, yeah, that SEC, gave the green light for something folks in the ETF space have been begging for—in-kind creations and redemptions for crypto exchange-traded products (ETPs). In plain English? Authorized participants can now swap ETF shares for the actual crypto—Bitcoin or Ether—not just cold, boring cash.
On Tuesday, the agency made it official. The new rule applies to already approved Bitcoin and Ether funds, which means investors could now receive BTC or ETH directly when they redeem their ETF shares. Pretty slick, especially when you consider all the slippage and trading costs that this could now skip over.
“It’s a new day at the SEC,” said Chair Paul Atkins in a statement that actually sounded… kind of optimistic? He claimed the goal is building a “fit-for-purpose” regulatory framework for crypto. Whether they’re late to the party is another story, but hey—at least they showed up.
More Efficient. Less Expensive. About Time.
Jamie Selway, director of Trading and Markets at the SEC, also chimed in, saying this move would make crypto ETFs “less costly and more efficient” for issuers, traders, and everyday investors. That’s because, instead of liquidating assets to redeem for cash, the fund can just hand over the actual coins. Fewer steps. Less friction.
Previously, when spot Bitcoin and Ethereum ETFs were first approved in 2024, the SEC only allowed cash redemptions. That policy stuck around a bit longer than most hoped. But lately, the vibe has been shifting—especially under the Trump administration, which has been a bit more crypto-curious.
Policy Tailwinds and Political Muscle
The recent approval didn’t just come out of thin air. Commissioner Hester Peirce hinted last month at the Bitcoin Policy Institute conference that the SEC was leaning toward allowing in-kind redemptions soon. Now here we are.
Meanwhile, Congress has been on a tear—passing three big crypto-related bills this month alone. These tackle market structure, stablecoin frameworks, and a firm “nope” to central bank surveillance coins. It’s all part of a broader push to modernize U.S. crypto policy—and it’s definitely adding fuel to the ETF boom.
ETFs Keep Surging, ETH Joins the Party
Just look at the numbers. Spot Bitcoin ETFs in the U.S. have seen 12 straight days of inflows, raking in a wild $6.6 billion in assets. Total BTC held by these ETFs? North of 1.29 million coins—worth about $152.1 billion.
Ether’s not lagging, either. BlackRock’s iShares Ethereum ETF just sprinted past $10 billion in assets in 251 days. That makes it the third-fastest fund to ever hit that milestone. Not bad for the “other” crypto.
