SEC Approves In-Kind Structures for Crypto ETPs
The US Securities and Exchange Commission (SEC) has approved in-kind structures for certain Bitcoin and Ethereum exchange-traded products, making them more efficient. This change allows authorized participants to exchange baskets of underlying assets for ETF shares instead of using cash. The decision aligns crypto-based ETPs with traditional commodity and equity ETP practices.
The previous cash-only structure required the issuer to bear transaction costs when buying or selling cryptocurrency. In contrast, in-kind structures enable authorized participants to deliver digital assets directly to the trust's custody account. This reduces market disruption during large inflows or outflows and keeps ETF prices aligned with the value of underlying holdings.
The SEC decision follows a period where it restricted crypto ETPs to cash-only structures due to concerns about broker-dealer registration and cryptoasset custody. The US spot Bitcoin ETF market held over $100 billion in net assets as of early September 2026.