New SEC rule lets investors redeem Bitcoin, Ethereum directly from ETFs

New SEC rule lets investors redeem Bitcoin, Ethereum directly from ETFs originally appeared on TheStreet.

The U.S. Securities and Exchange Commission (SEC) has officially approved in-kind creation and redemption processes for all spot Bitcoin and Ethereum exchange-traded funds (ETFs).

The move, announced on July 29, allows authorized participants — typically large financial institutions — to directly exchange ETF shares for BTC or ETH, rather than having to convert back and forth into cash.

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Learn More Powered by Money.com - Yahoo may earn commission from the links above. The result is a faster, more cost-efficient system, especially for institutional investors seeking arbitrage opportunities or real-time market exposure.

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“It’s a new day at the SEC,” said SEC Chairman Paul S. Atkins. “A key priority of my chairmanship is developing a fit-for-purpose regulatory framework for crypto asset markets. 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."

This marks the first major crypto-friendly policy shift under Atkins. Until now, all spot crypto ETFs approved by the SEC, beginning in January 2024, were limited to cash-based transactions, which often introduced inefficiencies.

The Commission also greenlit options-related enhancements, including increased position limits on certain Bitcoin ETFs, mixed BTC-ETH fund proposals, and more flexibility in the trading of flexible exchange (FLEX) options.

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According to Jamie Selway, Director of the Division of Trading and Markets, “In-kind creation and redemption provide flexibility and cost savings to ETP issuers, authorized participants, and investors, resulting in a more efficient market.”

New SEC rule lets investors redeem Bitcoin, Ethereum directly from ETFs first appeared on TheStreet on Jul 29, 2025

This story was originally reported by TheStreet on Jul 29, 2025, where it first appeared.

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