SEC Approves In-Kind Transactions for Bitcoin and Ethereum ETFs: A Game-Changer for Crypto Markets

• SEC approves in-kind transactions for BTC and ETH ETFs, reducing costs by up to 20%.
• Pro-crypto Trump administration drives regulatory shift after decade-long delays.
• Debate intensifies over favoritism toward BTC/ETH, leaving altcoins like XRP behind.

In a landmark decision, the U.S. Securities and Exchange Commission (SEC), under Chairman Paul Atkins, has approved in-kind creations and redemptions for Bitcoin (BTC) and Ethereum (ETH) Exchange Traded Funds (ETFs).

Reported by Bloomberg journalist Eleanor Terrett, this shift allows market makers to deliver or receive actual cryptocurrencies instead of cash, aligning these ETFs with traditional commodity ETFs like those backed by gold. This move, detailed in SEC filings from Nasdaq, CBOE, and NYSE, is expected to reduce transaction costs by up to 20%, according to a 2023 Journal of Financial Economics study on ETF efficiency, enhancing liquidity and operational flexibility for institutional investors.

The approval marks a significant departure from the cash-only model enforced under former SEC Chair Gary Gensler, who resisted such measures for over a decade due to concerns over market manipulation. The policy shift coincides with a pro-crypto stance from the Trump administration, bolstered by the passage of three crypto-friendly bills in Congress this month, including the Genius Act. This regulatory pivot has fueled a 12-day inflow streak into Bitcoin ETFs, injecting $6.6 billion as reported by Cointelegraph, signaling robust institutional confidence.

However, the decision has ignited controversy. Critics, including some X users like @Trey5610 and @MemphisCryptoKing, argue it favors BTC and ETH, potentially sidelining altcoins like XRP and Solana, which lack similar ETF approvals. The ongoing SEC case against Ripple (XRP) remains unresolved, fueling speculation about regulatory bias. Despite this, analysts like Bloomberg’s James Seyffart suggest in-kind provisions could pave the way for future altcoin ETFs, pending further regulatory clarity.

This development underscores a maturing crypto market, bridging traditional finance with digital assets. Investors may benefit from cost savings and improved market depth, though the focus on BTC and ETH highlights the need for equitable regulation across the crypto ecosystem. As the market evolves, all eyes will be on the SEC’s next steps for altcoin integration.

Disclaimer: This article is for informational purposes only and does not constitute financial advice. CoinCryptoNewz is not responsible for any losses incurred. Readers should do their own research before making financial decisions.