Top institutions on Wall Street are collectively laying out in the crypto market, as six leading ETF institutions have recently submitted amendments to the U.S. SEC for cryptocurrency physical redemption, an action seen as an important signal that may drive changes in market structure. For ordinary investors, it is necessary to clarify the logic behind it and seize potential opportunities.

Core event: Institutions conspire to open a 'VIP channel'

Participating institutions: Six giants including 21Shares, Fidelity, and Franklin Templeton recently collectively submitted amendments requesting the approval of physical redemption models for Bitcoin and Ethereum ETFs (i.e., institutions can directly exchange ETF shares for corresponding cryptocurrencies without first selling tokens for cash).

Regulatory signal: Bloomberg ETF analyst James Seyffart interprets that the SEC is communicating details with institutions, and this 'positive trend' suggests that the regulatory body may be quietly releasing favorable signals.

Threshold reminder: It should be noted that this type of channel is currently mainly aimed at 'authorized institutions' such as Goldman Sachs and Morgan, and ordinary retail investors cannot directly participate for now.

Potential impact on the crypto market

Reduce selling pressure, stabilize coin prices: When institutions redeem ETFs, fund companies need to sell tokens for cash, which can easily trigger market crashes; if it changes to physical redemption, institutions can directly exchange tokens to exit the market, significantly reducing selling pressure and helping to stabilize coin prices.

Reduce institutional concerns about increasing positions: Previously, institutions were cautious about heavily investing in crypto ETFs due to fears of massive redemptions causing a crash; under the physical redemption model, the impact of fund inflows and outflows on the market is reduced, which may encourage institutions to increase their allocation.

Ethereum may become a hidden winner: This amendment explicitly includes Ethereum ETFs, not only Bitcoin benefits, but ETH and its staking and re-staking sectors (such as Lido, EigenLayer) may also be driven.

Retail operation suggestions

Spot investors: They can appropriately increase their holdings in Bitcoin and Ethereum during pullbacks, especially Ethereum's pullback may present a layout opportunity; for staking-related coins (such as LDO, RPL), small positions can be taken to share in the ecological dividends.

Contract traders: It is recommended to move up stop-loss for long positions and pay attention to key resistance levels (such as 0.12394 SPK resistance level) to avoid hard resistance risk; wait for a confirmed trend after breaking through previous highs before chasing positions to prevent being 'cut' by false news.

Conservative investors: They can refer to a position allocation of '50% BTC/ETH + 30% staking coins + 20% cash' to maintain a flexible state of being able to attack when advancing and defend when retreating.

Behind this institutional action is a signal of further integration between the crypto market and traditional financial systems. If the physical redemption model is implemented, it may inject new momentum into the market. For retail investors, there is no need to blindly follow the trend; one should consider their own risk tolerance and layout based on understanding the rules.

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