🔍 The Big Shift

In a move that could reshape the crypto landscape, the SEC has approved in-kind creations and redemptions for crypto asset exchange-traded products (ETPs). This is a significant departure from the previous requirement that limited creations and redemptions to cash only.

“It’s a new day at the SEC,” said Chairman Paul S. Atkins. “Investors will benefit from these approvals, making these products less costly and more efficient.”

By permitting in-kind transactions, the SEC aims to align crypto ETPs with other commodity-based ETPs, fostering a more dynamic market.

💬 Expert Opinions

Jamie Selway, Director of the Division of Trading and Markets, emphasized the importance of this development:

“The Commission’s decision today is an important development for the growing marketplace for crypto-based ETPs. In-kind creation and redemption provide flexibility and cost savings to ETP issuers, authorized participants, and investors, resulting in a more efficient market.”

This move is expected to attract more investors and authorized participants by reducing operational costs and increasing market efficiency.

🚀 Additional Approvals

The SEC didn't stop there. They also approved various orders that advance a merit-neutral approach to crypto-based products. These include:

• Exchange applications to list and trade ETPs holding mixed spot bitcoin and ether.
• Options on certain spot bitcoin ETPs.
• Flexible Exchange (FLEX) options on shares of certain BTC-based ETPs.
• Increased position limits up to 250,000 contracts for listed options on certain BTC ETPs.

These measures are designed to create a more inclusive and expansive crypto market.