SEC Commissioner Hester Peirce stated that the agency is considering approval of an in-kind method, allowing Bitcoin ETF investors to directly exchange shares for Bitcoin.
Speaking at a Bitcoin Policy Institute panel, Peirce mentioned that the “in-kind creation and redemption” method, enabling direct swaps of ETF shares for Bitcoin instead of cash, is currently under review. Several prominent financial institutions have submitted applications to adopt this mechanism, aiming to eliminate the complexities associated with cash-based settlements.
Under the current system, ETF managers must sell Bitcoin on the open market to provide cash to investors redeeming their ETF shares, creating additional costs and delays. With the proposed in-kind approach, investors could directly receive Bitcoin in exchange for their ETF shares. Experts suggest this method would streamline ETF trading, making transactions faster, cheaper, and more efficient.
