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.
In-kind redemptions and creations allow for the direct exchange of the underlying assets of the ETF (Bitcoin or Ethereum) for ETF shares, bypassing the need for cash.
This method eliminates the need for participants to sell the underlying crypto to create shares, reducing the bid/ask spread and avoiding additional broker commissions.
The proposal, published Thursday morning, pushes the boundaries of crypto ETFs in the U.S., opening new avenues for investors to tap into Bitcoin (BTC ($83,190.81)) and Ethereum (ETH ($1,900.20)) without holding the assets physically.
As the SEC reviews Cboe’s proposed rule change, a public comment period has been opened, allowing stakeholders to share their thoughts before a final decision is made.
Authorized participants—institutions involved in the creation and redemption process—will be eligible to use the in-kind transaction model, says the filing.
Individual investors will still be required to use the cash-based model when purchasing or r…
