Securities and Exchange Commission gives green light to exchange-traded funds for cryptocurrencies using in-kind assets and redemption processes
In the world of cryptocurrency, the Securities and Exchange Commission (SEC) has made some significant moves that could shape the future of digital asset investing. Here's a rundown of the latest developments:
The SEC has approved orders for in-kind creations and redemptions for crypto asset Exchange-Traded Funds (ETFs), a move that is expected to bring greater efficiency to the market. This new method allows shares of exchange-traded products to be created and destroyed using the actual underlying assets (BTC and ETH) instead of cash, improving price tracking and eliminating trading fees from buying and selling crypto on exchanges.
However, the SEC has paused approving new crypto ETFs involving spot assets and staking until further review. This decision has been made in light of the growing complexity of staking mechanisms and the need for a deeper understanding of their implications.
Staking for Ether spot ETFs, in particular, is acknowledged as potentially market-changing. If approved, it could attract strong institutional interest and significantly alter market dynamics. However, as of August 2025, staking-enabled crypto ETFs remain unapproved, with decisions expected after ongoing regulatory reviews in late 2025.
The approval of various crypto-related products by the SEC, such as ETFs holding mixed Bitcoin and Ether, options on spot Bitcoin ETFs, and Flexible Exchange (FLEX) options on Bitcoin ETF shares, indicates a growing interest and acceptance of cryptocurrencies in the traditional financial market.
ETF expert Nate Geraci reported that spot Ether ETFs have seen their 18th straight day of inflows and a total of $5.4 billion in new capital. This surge in interest could be a positive sign for the future of crypto ETFs, especially if staking approvals are forthcoming.
The SEC's decisions are not just about efficiency and market growth. They are also about promoting greater competition and innovation in the crypto market. As Jamie Selway, Director of the Division of Trading and Markets, stated, these approvals will benefit investors, making these products less costly and more efficient.
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As we wait for the SEC's decisions on staking for crypto ETFs, it's clear that the future of digital asset investing is shaping up to be an exciting one. Stay tuned for more updates as the regulatory landscape continues to evolve.
- The approval of orders for in-kind creations and redemptions for crypto asset ETFs by the SEC is expected to bring greater efficiency to the market, as shares of exchange-traded products can now be created and destroyed using the actual underlying assets (BTC and ETH) instead of cash.
- The SEC has paused approving new crypto ETFs involving spot assets and staking until further review, acknowledging the growing complexity of staking mechanisms and the need for a deeper understanding of their implications.
- If approved, staking for Ether spot ETFs could attract strong institutional interest and significantly alter market dynamics, potentially changing the future of crypto ETFs.
- The SEC's decisions regarding crypto ETFs, such as the approval of various crypto-related products and the ongoing review of staking-enabled ETFs, indicate a growing interest and acceptance of cryptocurrencies in the traditional financial market.
