Fidelity is among several major asset managers that have requested authorization for in-kind redemptions in their spot cryptocurrency ETFs. These redemptions allow authorized participants to exchange shares of the ETF directly for the underlying cryptoassets, rather than cash. These mechanisms are commonly used in traditional ETFs to reduce trading costs and tax implications.
While the SEC recently acknowledged a similar request from BlackRock related to its spot Ethereum ETF, it has decided to delay Fidelity's proposals for Bitcoin and Ethereum ETFs. The regulatory agency has not provided a timeline for a potential final decision.
Fidelity is not the only issuer facing delays. In April, the SEC also postponed resolutions on WisdomTree's in-kind redemption proposals for its Bitcoin (BTCW) and Ethereum (ETHW) Funds, as well as for VanEck's Bitcoin Fund (BITB).
