The issue of redemptions in-kind for Bitcoin ETF remains unresolved, while the Securities and Exchange Commission (SEC) of the United States has announced the postponement of the decision on the Bitwise Bitcoin ETF Trust and Ethereum ETF funds.
Despite the political climate more favorable to cryptocurrencies, following the recent reforms of the current Trump administration, the financial supervisory authority confirms its caution and sets a new deadline: September 8.
Bitwise: what are in-kind redemptions in Bitcoin and Ethereum ETFs
The redemptions in-kind represent a key function in modern ETFs on Bitcoin and Ethereum. They allow investors to convert their fund shares directly into the underlying assets – in this case, cryptocurrencies like Bitcoin and Ethereum.
This system allows to avoid certain taxes typical of cash refunds and replicates a feature already familiar in traditional ETFs on global financial assets. Consequently, the introduction of these methods is strongly requested by industry operators, who aim to attract new capital and offer greater liquidity to investors.
The decision of the SEC and the current regulatory framework
In the official document filed on Wednesday, the SEC specifies the intention to “designate a longer period” to evaluate the proposal to amend the management methods of ETFs on Bitcoin and Ethereum. The decision specifically concerns the in-kind redemptions requested by the manager Bitwise, both for the Bitcoin ETF Trust and the Ethereum ETF, and sets the new deadline as September 8. This postponement, in fact, confirms the regulatory caution of the entity, despite the industry’s requests for alignment with more permissive international standards in the relationship between ETFs and cryptocurrencies.
Furthermore, the SEC has also postponed the evaluation of BlackRock’s request regarding the in-kind redemption for the iShares Ethereum Trust (ETHA), setting the deadline to August 26. Both time extensions fall within the maximum periods allowed (90 days) for the examination of regulatory proposals on innovative funds.
Motivations and doubts about the U.S. approach
Despite a growing openness towards cryptocurrencies by some political representatives, the SEC continues to raise doubts about the complexity of in-kind redemptions and, above all, about their security. This type of operation, in fact, involves additional risks compared to conventional instruments, requiring careful evaluation of custody infrastructures and possible implications on the market. However, investor interest and pressure from asset managers are forcing the regulatory debate to proceed more rapidly than in the past.
ETF on cryptocurrencies: increasing pressure from companies and investors
The growing demand for cryptocurrency ETFs is evident not only in the main digital assets – Bitcoin and Ethereum – but also in a wide range of instruments linked to memecoin, altcoin, and even NFT (Non Fungible Token). More and more asset managers are submitting requests related to ETFs that track not only the price of Bitcoin but also additional services such as staking or innovative management of redemptions.
This trend emerges in parallel with the regulatory changes introduced by the Trump administration, which removed some restrictions imposed by regulators during the previous Biden presidency. The more favorable political framework consequently translates into an unprecedented regulatory momentum, even though the SEC maintains strict control over every proposed innovation.
The fiscal and operational implications of in-kind redemptions for Bitcoin ETFs
One of the most crucial aspects of in-kind redemptions for Bitcoin ETF concerns tax optimization. By allowing the redemption of shares directly through cryptocurrency instead of conversion to fiat (legal currency), investors can, in some cases, avoid capital gains taxes that arise from cash transactions. However, this practice requires sophisticated custody procedures, verification, and contextual transparency on the operations.
For the SEC, the introduction of these methods entails the need to ensure that the market remains safe, free from manipulation and systemic risks. Consequently, the regulatory path is extended, even in the presence of pressing requests from the private sector.
How the landscape of Bitcoin ETFs is changing in the United States
The landscape of ETF Bitcoin in the United States is in a phase of transformation. With a growing political focus on the topic of cryptocurrencies and a climate more open to innovation, the digital asset sector sees increasing possibilities for the approval of increasingly sophisticated instruments. However, questions remain about security, operation, and possible long-term effects.
- Investors in search of greater flexibility and tax advantages
- Emittenti pushing for equal opportunity compared to traditional ETF
- Authorities that carefully evaluate new requests to avoid destabilizations
The deadline of September 8th therefore represents a fundamental testing ground for the regulation of Bitcoin ETFs at the national level.
Future prospects for regulation of Bitcoin ETFs
The postponement of the SEC decision on in-kind redemptions introduces a window of strategic reflection for the entire investor community in Bitcoin and Ethereum. The coming weeks will be decisive in understanding whether the USA, led by an administration more open to innovations in the digital asset sector, will be able to seize the opportunity to lead the global market of cryptographic ETFs with modern rules and attractive tools for both retail and institutional savings.
However, the outcomes of the upcoming deliberations will influence not only the future of fondi su Bitcoin, but also the reputation of American laws on finanza decentralizzata. Investors and industry operators will need to closely monitor developments and prepare to adapt their strategies, aware that regulation, even when it slows down, still represents a guarantee of credibility for the entire digital asset ecosystem.