EddieJayonCrypto
13 Mar 25
Cboe BZX Exchange has filed a proposed rule change with the U.S. Securities and Exchange Commission (SEC) on behalf of Inveso Galaxy to allow for in-kind creations and redemptions of shares for its spot Bitcoin ETF and Ethereum ETF. This method enables direct exchange of the underlying assets of the...
Cboe BZX Exchange has proposed a rule change with the U.S. Securities and Exchange Commission (SEC) for Invesco Galaxy Bitcoin and Ethereum ETFs, aiming to allow in-kind redemptions and creations. This move could potentially enhance ETF market efficiency by reducing bid/ask spread and broker commissions. The SEC has initiated a public comment period for this proposed rule change, offering stakeholders an opportunity to share their perspectives.
The proposed in-kind transactions model would enable the direct exchange of the underlying assets of the ETF for ETF shares, eliminating the need for cash. This innovative approach creates new avenues for investors to access Bitcoin and Ethereum without physically holding the assets. While authorized participants would be eligible to use the in-kind transaction model, individual investors would continue using the cash-based model. The filing reflects similar strategies adopted by major ETF providers such as BlackRock.
However, Bitcoin and Ethereum ETFs have encountered challenges, experiencing consecutive days of significant outflows, which could impact their market dynamics. Notably, Bitcoin ETFs recently saw outflows of $371 million over seven days, while Ethereum ETFs faced outflows of $21.57 million over five days, according to data from Farside Investors.