The American Commission for Securities and Exchange (SEC) approved the use of creation and buy -in processes in kind for all Bitcoin (BTC) and Ethereum (ETH) (ETH) (ETF), marking a significant change in the regulator approach to digital assets under its new direction.
The decision allows authorized participants – Institutional investors who facilitate the liquidity of the FNB – to create and buy the ETF shares directly in BTC or ETH, rather than having to use cash. The mechanism is widely considered to be more efficient and secure because it allows authorized participants to closely monitor investors and adjust the FNB sharing supply in real time, without the need to convert assets in the two directions in fiduciary currency.
This marks the first Political Mouvement of Crypto-Friendly of the SEC since Paul Atkins was appointed president of the agency earlier this year. Atkins, a former SEC commissioner, known for his opinions adapted to the market, has long pleaded for a more open regulatory approach to digital assets.
“” It’s a new day at La SEC, “said Atkins in a press release.” A key priority of my presidency is to develop a regulatory framework adjusted for the markets of cryptographic assets, “he continued.” I am happy that the Commission approved these orders allowing creations in kind and redemption for a crowd of crypto asset andps. Investors will benefit from these approvals because they will make these products less expensive and more effective. “”
The change comes after Blackrock filed a request in January to allow transactions in kind for his Ishares Bitcoin Trust (Ibit), and other issuers, including Fidelity and Ark Invest, quickly followed.
Until now, all the Approved Spot Bitcoin ETF – first Greenlit by the SEC in January 2024, have only made it possible to operate with cash creations and buyouts. This requirement has added operational complexity and was largely considered an obstacle to efficiency for institutional market creators.
The SEC has also approved an increase in position limits for negotiation options on IBIT, a decision that will allow traders to hold larger options related to the fund.
The positions of position are regulatory ceilings which restrict the number of options of options that a merchant or an institution can control in a single title to prevent market manipulation or excessive risk. By increasing these limits, the SEC signals greater comfort with the liquidity and maturity of the Bitcoin ETF market and offering institutional investors more flexibility to hide or express opinions on the performance of the fund.
Changes could considerably increase institutional participation to the two ETF groups by reducing friction for arbitration and coverage strategies.
The SEC decision highlights an increasing desire under the direction of Atkins to treat cryptographic assets in the same regulatory executives applied to traditional markets.
