SEC Approves In-Kind Redemptions for Bitcoin and Ether ETFs
Market Summary
The U.S. Securities and Exchange Commission (SEC) has permitted in-kind redemptions for bitcoin and ether exchange-traded funds (ETFs), allowing institutional traders to create and redeem ETF shares directly with BTC or ETH. This decision enhances efficiency by avoiding fiat conversions.
Key points:
- Hong Kong's Securities and Futures Commission allowed in-kind redemptions for crypto ETFs since early 2023, requiring partnerships with licensed local exchanges.
- The SEC previously favored cash-only redemptions due to custody, anti-money laundering concerns, and operational uncertainties.
- SEC Commissioner Mark Uyeda criticized the agency's distinction between commodity-based and crypto ETFs regarding redemption practices.
- SoSoValue warns that physical bitcoin subscriptions will not generate cash inflows, complicating flow tracking for U.S. ETFs.
Market Movements
BTC: Bitcoin trades above $117,500 amid weak momentum and ETF outflows, with profit-taking near $118K and macroeconomic pressures.
ETH: Ethereum is priced above $3,700, viewed as a strong investment alongside bitcoin.
Gold: Gold rebounded to $3,334, ending a four-day decline before the Fed meeting.
Nikkei 225: Asia-Pacific markets opened mixed; Japan’s Nikkei 225 is flat at opening.
S&P 500: U.S. stocks fell, ending a six-day record streak amidst economic data and upcoming Fed rate decisions.