The United States Securities and Exchange Commission (SEC) has approved the in-kind creation and redemption of crypto assets exchange-traded products (ETPs). For the past 19 months, since the first spot Bitcoin (BTC) exchange-traded fund (ETF) was approved, the creation and redemption have been limited to an in-cash basis only.
Following the July 29 approval, the spot Bitcoin and Ethereum ETFs will seamlessly trade with stock markets. Consequently, the crypto market will be seamlessly connected with the traditional stock market.
“It’s a new day at the SEC, and a key priority of my chairmanship is developing a fit-for-purpose regulatory framework for crypto asset markets,” Paul S. Atkins, SEC Chairman, noted. “I am pleased the Commission approved these orders permitting in-kind creations and redemptions for a host of crypto asset ETPs. Investors will benefit from these approvals, as they will make these products less costly and more efficient.”
The approval of in-kind creation and redemption of crypto assets ETPs marked a major turning point for the mainstream adoption of digital assets. According to on-chain data analysis from SoSoVaLue, the U.S. spot BTC ETFs have recorded a cumulative total net inflow of about $54.9 billion, thus currently holding around $153 billion in total net assets.
The U.S. spot Ether ETFs, led by BlackRock’s ETHA, have recorded a cumulative total net inflow of approximately $9.4 billion, thus currently holding a total net asset of $21.5 billion. The approval of in-kind creation and approval will likely propel the U.S. spot Ether and Bitcoin ETFs to a trillion-dollar market in the near future.
The imminent cash inflow to the crypto industry from the stock market will play a crucial role in the ongoing 2025 bull market.
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