SEC amends Crypto ETF: Upgrading structure, not a retail investor revolution.

The recent decision by the Securities and Exchange Commission (SEC) allows cryptocurrency ETF issuers to directly exchange Bitcoin and Ethereum for shares, which experts consider an upgrade in structure rather than a revolution for retail investors.

Bloomberg ETF expert Eric Balchunas called this change a "plumbing fix," arguing that it will not significantly alter how retail investors interact with Crypto ETF funds. "This does not mean that investors can exchange IBIT shares for real Bitcoin," he wrote on X, "but it shows that the SEC is willing to regard cryptocurrency as a legitimate asset."

The changes announced on Tuesday allow asset management companies to directly swap cryptocurrency tokens for ETF shares, instead of having to use cash. This mechanism — known as "in-kind creation and redemption" — helps eliminate conversion costs, improve price accuracy, and increase operational efficiency for the fund, thereby benefiting investors through lower costs and narrower price spreads.

Large institutions behind cryptocurrency ETFs are quickly adopting this new structure. On Thursday, Bitwise Asset Management announced that their Bitcoin and Ether ETF funds will begin offering a mechanism for creation and redemption of physical assets, becoming the first cryptocurrency ETFs in the U.S. to implement the new mechanism following the SEC's decision on July 29.

"It's just about making the pipeline smoother," Balchunas added, while recalling that former SEC Chairman Gary Gensler had opposed this mechanism due to concerns that funds could "receive assets from non-transparent sources."

This move brings cryptocurrency ETFs closer to the operational structure of traditional ETF products, thereby reducing costs and increasing transparency in operations. According to Bitwise Chairman Teddy Fusaro, this decision lays the groundwork for cryptocurrency to "stand on the same platform" as institutional financial products.

"This is an important step to deepen the integration between digital assets and the traditional financial system," Federico Brokate, Business Director at 21Shares in the U.S., shared.

Bitcoin ETFs in the US currently hold over 6% of the total supply

The SEC's decision and the swift action from Bitwise come amid the continuing acceleration of Bitcoin ETFs in the US to accumulate Bitcoin.

According to data from Bitbo, there are currently 12 Bitcoin ETF funds in the US holding 1,299,401 BTC, equivalent to 6.18% of the total supply of 21 million BTC.

BlackRock's iShares Bitcoin Trust is leading with 740,601 BTC, equivalent to 87.66 billion USD.

The second is the Fidelity Wise Origin Bitcoin Fund with 205,864.2 BTC, worth about $24.37 billion. The Bitwise Bitcoin ETF holds 40,638.7 BTC, worth about $4.81 billion.

Vương Tiễn