1) “The SEC’s refusal to allow the in-kind creation and redemption of spot BTC ETFs forces market participants to pre-fund many of their bitcoin ETF-related transactions,” says Matthew Sigel, head of digital assets research at VanEck, which manages a spot bitcoin ETF.
2) “Such a sequence makes the ETF process more capital intensive and thus more expensive to the end-user than it needs to be. If and when in-kind creation and redemption is approved, we expect trading spreads and the discount to NAV [net asset value] of bitcoin ETFs to narrow even more,” says Sigel.