SEC Puts Off Choice on Bitwise's Bitcoin and Ethereum ETFs' Physical Asset Redemptions
In a significant development for the cryptocurrency industry, the U.S. Securities and Exchange Commission (SEC) has extended its timeline for weighing in on in-kind redemptions for the Bitwise Bitcoin ETF Trust and Bitwise Ethereum ETF. The new deadline for the SEC's decision is now set for August 26 for BlackRock's request to allow in-kind redemptions for its iShares Ethereum Trust (ETHA), and September 8 for the Bitwise ETFs.
The extension comes as the SEC continues to carefully consider the proposed rule changes and the issues raised by the in-kind redemption model. This model, which allows Authorised Participants to redeem ETF shares directly for the underlying Bitcoin or Ethereum assets, is a process similar to how traditional commodity ETFs operate and is intended to reduce errors and delays in processing.
Industry experts and some SEC commissioners, like Hester Peirce, remain optimistic that approval of in-kind redemption for crypto ETFs will eventually happen. This approval could have tax implications, as in-kind redemption would allow asset redemption without liquidation.
Meanwhile, the SEC has also placed Grayscale's multi-token ETF under review. The SEC's decision could approve, deny, or further review the request for in-kind redemptions. In-kind redemptions have been a sensitive topic, with regulators raising concerns about their complexity and security.
However, there are signs that the SEC might approve the long-awaited spot Solana ETFs soon. This would be a significant milestone for the Solana ecosystem, as it would provide a regulated and accessible way for investors to gain exposure to the cryptocurrency.
The trading price of Bitcoin was at about $118,900, up 1.1% in the past 24 hours, while Ethereum reached a five-month high during the same period, trading at $3,360, up 9%. Asset managers are flooding regulators' desks with applications for ETFs tracking memecoins, altcoins, NFTs, and requests to add staking and other attractive offerings to existing funds.
The data for Bitcoin and Ethereum trading prices is provided by CoinGecko. The U.S. President Donald Trump's administration has relaxed crypto industry regulations, and the SEC has welcomed a pro-crypto chairman Paul Atkins and removed digital asset skeptics from its ranks since January.
In-kind redemptions allow investors to exchange shares of an ETF for its underlying tokens, a feature that is eagerly sought after by issuers and is available in non-crypto ETFs. The ongoing deliberation by the SEC reflects the importance of these proposals and the potential impact they could have on the cryptocurrency market.
- The SEC has extended the timeline for deciding on in-kind redemptions for the Bitwise Bitcoin ETF Trust and Bitwise Ethereum ETF, with decisions now scheduled for August 26 and September 8, respectively.
- The in-kind redemption model, which allows Authorised Participants to redeem ETF shares directly for the underlying Bitcoin or Ethereum assets, is similar to how traditional commodity ETFs operate.
- Industry experts and some SEC commissioners, such as Hester Peirce, are optimistic that approval of in-kind redemption for crypto ETFs will eventually happen, with potential tax implications.
- The SEC has placed Grayscale's multi-token ETF under review, with a possible decision to approve, deny, or further review the request for in-kind redemptions.
- There are signs that the SEC might approve the long-awaited spot Solana ETFs soon, which would be a significant milestone for the Solana ecosystem.
- Asset managers are flooding regulators' desks with applications for ETFs tracking memecoins, altcoins, NFTs, and requests to add staking and other attractive offerings to existing funds.
- The U.S. President Donald Trump's administration has relaxed crypto industry regulations, and the SEC has welcomed a pro-crypto chairman Paul Atkins and removed digital asset skeptics from its ranks since January.
