🕒 What’s the situation?

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* The U.S. Securities and Exchange Commission (SEC) has delayed its decision on allowing in-kind redemptions for Bitwise’s Bitcoin and Ethereum spot ETFs.

* The new decision deadline is now September 8, 2025 (pushed back from the earlier July/45-day review period)

⚙️ What are “in-kind redemptions”?

* Traditionally, when investors redeem ETF shares, they receive cash.

* With in-kind redemptions, authorized participants can exchange ETF shares directly for the underlying assets(Bitcoin or Ether), and vice versa.

* This is how many traditional commodity ETFs operate and is sought-after in crypto ETFs for benefits like tax efficiency, lower trading costs, and slippage reduction

✅ Why it matters

1. Tax Benefits & Efficiency

* In-kind transactions can avoid triggering capital gains taxes, making ETF trading more efficient for institutions

2. Institutional Flow Enhancement

* Helps large players move large volumes of crypto with reduced friction and cost

3. Market Confidence & Maturation

* A green light would indicate the SEC is aligning crypto ETFs with traditional financial infrastructure, paving the way for increased institutional adoption

🧭 What’s next?

* The SEC has until September 8, 2025 to either approve, deny, or ask for more comments on Bitwise’s proposal.

* This outcome could set a precedent for all future crypto spot ETFs—including those from BlackRock, Fidelity, etc.—to offer similar in-kind features.

🎯 Bottom line

🚦 The SEC’s decision to delay reflects a careful, cautious approach—not rejection.
✅ If approved, in-kind redemption would make crypto ETFs more tax-efficient, liquid, and institution-grade.
📅 The key date to watch: September 8, 2025.

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