The SEC approved in-kind creations and redemptions for crypto ETFs, allowing authorized participants to create and redeem shares on an in-kind basis. This move opens the door for institutional investors and signals a normalization milestone for crypto ETFs, aligning them with traditional equity and bond counterparts.

The SEC took its time before approving in-kind redemptions for crypto ETFs, citing caution around crypto and concerns about protecting investors. The approval eliminates market asymmetries and inefficiencies created by cash-only redemption, enabling crypto-asset ETPs to manage exposure more cheaply and transparently.

In addition to approving in-kind creation and redemption, the SEC also voted to allow the listing and trading of products combining spot Bitcoin and Ether, as well as increased use of options on spot Bitcoin ETPs. The commission is seeking comments on whether exchanges should be able to list and trade large-cap crypto ETPs.

The approval of in-kind creations and redemptions for crypto ETFs was long overdue and paves the way for consideration of other digitally native asset structures and fund formats. It also indicates a broader shift in the SEC toward aligning legacy regulations with modern market infrastructure, providing relief for investors.

Read more at Yahoo Finance: Crypto ETFs Get Major Relief From SEC