As is known, the SEC approved spot Bitcoin ETFs in 2024. While approving them, it pressured them to include only cash refunds and rejected the in-kind refund option in spot ETF applications.
However, BlackRock has applied for in-kind repayments for its ISHARES Bitcoin ET at the beginning of 2025. At this point, companies including BlackRock have been asking the SEC for months to allow in-kind investments and repurchases specifically for Bitcoin ETFs.
At this point, if tax-advantaged refunds in kind are accepted, it will be positive for the cryptocurrency market. Because these features can be made without selling cryptocurrencies, they reduce the selling pressure in the market.
While this development is eagerly awaited, SEC Republican member Hester Peirce said that the in-kind refunds that the SEC has been delaying on Bitcoin ETFs are imminent.
Speaking at the Bitcoin Policy Institute, Hester Peirce said that in-kind creations and redemptions for Bitcoin (BTC) and crypto ETFs are on the horizon and will definitely come.
Peirce said that the SEC’s stance on Bitcoin ETFs is inadequate, noting that in-kind investment and refund application files are currently under review by the SEC.
“The SEC really mismanaged the spot Bitcoin ETF.
Additionally, the same investment and redemption applications for the spot Bitcoin ETF are going through the review process before the SEC.
So I think that will definitely be approved at some point. It’s a guess, but we’re seeing a lot of interest in these features.”
The SEC under US President Donald Trump has adopted a friendlier approach to Bitcoin and cryptocurrencies compared to the SEC under Joe Biden.
Since the Trump administration, ETF applications have not been limited to Bitcoin and Ethereum, with many top firms filing with the SEC for altcoins ranging from XRP to Solana (SOL) and Dogecoin (DOGE).
While the market expects altcoin ETFs to be approved in 2025, Bloomberg ETF analysts James Seyffart and Eric Balchunas say the SEC has a 90% or higher probability of approving most altcoin ETF applications.
*This is not investment advice.
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