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SEC Approves Flexible Crypto ETF Options Amid Rising Ether Inflows
SEC Approves – On Tuesday, the U.S. Securities and Exchange Commission (SEC) approved new orders allowing in-kind creations and redemptions for authorized participants in crypto asset ETFs. This marks a significant shift from previous approvals where spot Bitcoin and Ether ETPs were restricted to cash-based creations and redemptions.
What Are In-Kind Creations and Redemptions?
With the new approval, crypto ETFs can now create and redeem shares using the actual underlying assets — such as BTC and ETH — instead of cash. This method reduces trading fees, cuts down on bid-ask spreads, and improves overall market efficiency by speeding up the process and eliminating the need for exchanges to execute trades during creations or redemptions.
Benefits for Investors and the Market
SEC Chairman Paul Atkins highlighted the positive impact of this move: “Investors will benefit from these approvals, as they will make these products less costly and more efficient.” The ability to transact in-kind brings more precise asset holdings and keeps ETF prices closer to real asset prices.
Jamie Selway, Director of the SEC’s Division of Trading and Markets, called it an “important development” that brings “flexibility and cost savings to ETP issuers, authorized participants, and investors.”
Industry Reaction and What’s Next
Crypto ETF expert Eric Balchunas commented, “It’s not a huge impact to retail, but more of a plumbing fix. It just makes the pipes a little better.” Meanwhile, anticipation grows around the SEC’s potential approval of staking for crypto ETFs, which Nate Geraci, another ETF specialist, predicts could be next on the regulator’s agenda.
Additional SEC Approvals Fuel Crypto ETF Growth
Alongside this, the SEC approved several other crypto products, including ETFs holding a mix of Bitcoin and Ether, options on spot Bitcoin ETFs, and Flexible Exchange (FLEX) options on Bitcoin ETP shares. Spot Ether ETFs have notably seen their 18th consecutive day of inflows, totaling $5.4 billion in new capital, signaling strong investor interest.
