SEC Postpones Ruling on Bitwise In‑Kind ETF Redemptions
The SEC has opted to take additional time before reaching a verdict on Bitwise’s appeal for in-kind redemptions related to its BTC and ETH ETFs. Rather than providing an immediate approval or denial, the agency has prolonged the evaluation period until September 8.
This action leaves the possibility open, while also indicating that regulators are proceeding with caution before permitting direct exchanges of ETF shares for cryptocurrency.
What’s at Stake
In-kind redemptions may seem technical, but the concept is quite straightforward. It would allow significant investors to trading protocol ETF shares for the actual assets behind them, such as Bitcoin or Ether, instead of receiving cash equivalents. This feature is commonplace in traditional commodity ETFs, and digital currency managers aspire for similar agility. The benefits include reduced tax implications, easier trading, and enhanced efficiency, particularly for institutional investors handling large volumes.
It’s Not an Actual Rejection, More Time is Needed
This is not the SEC putting a stop to progress. It’s akin to keeping the vehicle in neutral while they reassess the route again. The initial 90-day timeline expired, prompting the agency to seek an extension for ongoing assessment of the proposed rule modification. The delay implies they’re not hurrying, but they’re not shutting the door either.
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Eyes on the Bigger Players
Bitwise is not the sole entity advocating for in-kind redemptions. BlackRock, VanEck, Fidelity, and 21Shares are all contenders in the ETF landscape, and numerous others are predicted to submit similar appeals. Commissioner Hester Peirce has mentioned that the concept is logical if managed appropriately. That “if” carries significant weight here. The SEC is keen to ensure this doesn’t evolve into an avenue for unregulated crypto investment or systemic risk.
September Will Be Telling
When September 8 arrives, the SEC will have several choices. It can greenlight the adjustment, reject it, request additional information, or open it up for further public commentary. The outcome could influence the trajectory of crypto ETFs for years to come. Should Bitwise receive approval, anticipate a surge of imitative requests. Conversely, a denial might indicate a more cautious approach for the future.
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What’s in the Bigger Picture?
Despite this being a postponement, it occurs during a period of increasing acceptance of crypto ETFs. Spot BTC ETFs are beginning to gain momentum. Ethereum ETFs are poised for introduction. And, for the first time in years, the SEC appears more receptive to structured innovation. The atmosphere is different now, even if progress is gradual. Investors are observing with keen interest, not only for Bitwise’s situation but for its implications for the broader industry.
The Bottom Line
The SEC isn’t outright denying the request. It’s indicating not at this moment. This distinction, though slight, is crucial. In-kind redemptions would make crypto ETFs resemble traditional ones significantly. This is encouraging news for institutions aiming to transact at scale without added complications. Whether it transpires in September or afterward, the overall trajectory seems clear. This is part of a larger narrative, and the next installment arrives in just a few weeks.
Another delay from the SEC — crypto ETF decisions moving at snail pace
— The Bakchod Bro
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Key Takeaways
- The SEC has postponed its ruling on Bitwise’s request for in-kind redemptions, establishing a revised deadline of September 8.
- In-kind redemptions would enable large investors to trading platform ETF shares for crypto asset rather than cash, enhancing tax efficiency and market fluidity.
- The postponement is not a denial, but indicates that the SEC is moving cautiously while considering potential risks and regulatory gaps.
- Other significant firms like BlackRock, VanEck, and Fidelity are anticipated to submit similar in-kind requests as the crypto ETF landscape progresses.
- The SEC’s upcoming decision in September could influence the operation of crypto ETFs and whether they align more closely with traditional ETF frameworks.
The post SEC Delays Decision on Bitwise In‑Kind ETF Redemptions appeared first on 99Bitcoins.
