The U.S. Securities and Exchange Commission (SEC) has taken another major step toward deeper integration of cryptocurrencies into the traditional financial world. Newly approved regulations now allow the creation and redemption of ETF shares through actual Bitcoin and Ethereum—meaning not in cash, but directly in digital assets.

🔄 Crypto Instead of Cash: A Game-Changer for ETFs

Thanks to this decision, investors can directly exchange crypto for ETF shares and vice versa. This mirrors a model already used with commodity ETFs like gold, and now it’s being extended to digital asset funds.

SEC Chair Paul S. Atkins emphasized that this innovation will bring investors cheaper and more efficient investment tools, while Jamie Selway, Director of Trading and Markets, called it a positive development for the crypto ETF sector.

📈 Big Players Got Their Way

The decision follows persistent lobbying by firms like BlackRock, Fidelity, and Grayscale, who have long pushed for their crypto ETFs to be treated like traditional funds. This move by the SEC reflects the growing influence and demand from these financial giants.

It also shows increasing regulatory openness—the SEC recently invited public comments on staking features in BlackRock’s proposed spot Ethereum ETF, signaling a willingness to approve more advanced crypto functionalities.

🛠️ Expanded Derivatives Options

Another update includes raising the position limit for options on Bitcoin ETFs from 25,000 to 250,000 contracts, encouraging greater liquidity and institutional involvement. The SEC also approved FLEX options, allowing investors to customize key features such as strike price, expiration date, and exercise style.

Bloomberg analyst Eric Balchunas wrote on X: “This is huge. It could ignite an explosion of Bitcoin option-based ETFs.”

📊 Altcoins Could Be Next

According to James Seyffart of Bloomberg, this regulatory update could pave the way for altcoin ETFs, such as those based on Solana, Avalanche, or Cardano. The in-kind creation and redemption feature could become a built-in part of new ETF filings, improving efficiency and price tracking.

🏛️ New Direction in Regulation

These changes follow the recent signing of the Genius Act by President Donald Trump, a law focused on modernizing financial policy with a technology-first approach. Experts suggest this is motivating the SEC to become more open and creative with crypto asset regulations.

💡 Investor Benefits

The ability to transact ETFs in actual crypto increases price transparency and ensures more accurate valuation of the underlying assets. The result: tighter bid-ask spreads and better efficiency for investors.

🔹 Summary:

The SEC has approved revolutionary changes that allow investors to enter and exit crypto ETFs using Bitcoin and Ethereum, pushing digital asset markets into a new era. This not only encourages broader institutional participation but also lays the groundwork for future altcoin ETFs and deeper integration of crypto into mainstream investing.


#crypto , #etf , #BTC , #SEC , #DigitalAssets

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