SEC’s In-Kind ETF Approval Could Reshape Crypto Markets

The SEC’s approval of in-kind redemptions for spot Bitcoin and Ethereum ETFs marks a turning point for institutional crypto adoption.

By allowing authorized participants to exchange shares directly for crypto (rather than cash), the decision reduces friction and costs for issuers like BlackRock and Fidelity.

Beyond in-kind approvals, the SEC also cleared:

• Multi-asset Bitcoin/Ethereum ETFs
• Bitcoin ETP options
• Expanded position limits

“This is a new chapter for crypto regulation,” said SEC Chairman Paul Atkins, hinting at further policy evolution. The move aligns with Commissioner Hester Peirce’s June prediction that in-kind redemptions were nearing approval.

Previously, the SEC’s cash redemption model forced issuers to sell Bitcoin before distributing proceeds—a process critics called inefficient. Now, with streamlined redemptions and new product options, crypto ETFs may see accelerated growth.