Cboe BZX Exchange Inc. has submitted a revised rule proposal. According to the filing , the proposal would allow in-kind redemptions for two major cryptocurrency exchange-traded funds (ETFs), the ARK 21Shares Bitcoin (BTC) ETF and the 21Shares Core Ethereum (ETH) ETF. This change addresses the technicalities surrounding spot Bitcoin and Ethereum ETFs. Investors Will Exchange Their ETF Shares for Crypto and Not Cash The proposed rule changes would allow ETFs to use in-kind redemptions and creations instead of the usual cash process. In-kind transactions let investors exchange their ETF shares for actual cryptocurrencies, like Bitcoin or Ethereum, rather than converting them to cash. This method is more efficient, as it helps avoid liquidity and price problems with cash redemptions. Meanwhile, Cboe BZX’s recent filing for a Bitcoin ETF comes after Nasdaq’s similar filing for BlackRock’s iShares Bitcoin Trust . Nasdaq also asked for approval for in-kind redemptions for its Bitcoin ETF. This shows that key players in the industry are working together on the technical needs of cryptocurrency-based ETFs. Over a year ago, before the SEC decided on spot Bitcoin ETFs, industry companies discussed technical details to meet regulatory standards. Adding in-kind redemptions could be an important move for the cryptocurrency ETF market as rules change. However, this feature is limited to institutional players and inaccessible to individual investors. Benefits of In-kind Redemptions for Institutional Players MartyParty, a pseudonymous crypto analyst, pointed out the added transparency that in-kind transactions would bring, enabling in-chain fund flow records. Chris J. Terry, chief architect at Bitseeker Consulting, highlighted the tax advantages of the proposed model, explaining that in-kind redemptions help minimize capital gains distributions, benefiting long-term investors in the fund. However, individual investors will have to rely on cash-based transactions, as clarified by James Seyffart, Bloomberg ETF analyst. While this change primarily benefits institutions, it indirectly aids all investors by enhancing ETF liquidity and efficiency. Meanwhile, these filings coincide with a surge in ETF activity . Cboe BZX Exchange Submit Multiple Spot Solana ETFs Filings Recall that the Cboe BZX Exchange filed four 19b-4 proposals on behalf of major asset managers last year. The filing was for Bitwise, VanEck, 21Shares, and Canary Capital to list spot Solana ETFs. If approved, these ETFs will trade on Cboe’s U.S.-based BZX Exchange. The timing of these filings coincides with the announcement of ex-SEC Chair Gary Gensler’s resignation . Known for his stringent stance on cryptocurrencies, Gensler’s departure marks the beginning of a friendlier regulatory environment for digital assets. This change may accelerate the approval of spot crypto ETFs, opening the door for wider adoption of Solana and other cryptocurrencies. The post Cboe Proposes In-Kind Redemptions for ARK 21Shares Bitcoin and Ethereum ETFs appeared first on TheCoinrise.com .
