SEC Delays Bitwise Crypto ETF Decision—Again—Leaving Investors in Regulatory Limbo

The SEC just hit snooze on Bitwise's in-kind crypto ETF proposal—because why make a decision today when you can punt it to next quarter?

Another delay, another round of speculation. The SEC's latest move keeps the crypto markets guessing—will they ever greenlight a structure that doesn't force funds to sell assets for cash redemptions?

Meanwhile, Wall Street's old guard quietly profits from the volatility. Funny how that works.

TLDR

• The SEC has extended the deadline for ruling on in-kind redemptions for Bitwise’s Bitcoin and Ether crypto ETFs.
• In-kind redemptions would allow investors to redeem ETF shares for actual Bitcoin or Ether instead of cash.
• The decision delay provides the SEC with additional time to evaluate the proposed rule changes and market implications.
• The SEC’s review could have tax and regulatory implications for investors in Bitcoin and Ether crypto ETFs.
• This extension is part of a broader trend of the SEC taking more time to evaluate crypto-related ETF proposals.

The U.S. Securities and Exchange Commission (SEC) has extended the deadline for ruling on in-kind redemptions for two Bitwise crypto ETFs. According to a filing on Wednesday, the SEC now has additional time to decide whether to approve the in-kind redemption process for Bitwise’s Bitcoin and Ether spot ETFs. The decision has been pushed back, but the time limit remains within the 45-day framework, extendable to 90 days.

Bitcoin Crypto ETF Redemption Delay

Bitwise’s bitcoin crypto ETF could see changes to its redemption mechanism, with the SEC now examining the possibility of allowing in-kind redemptions. In-kind redemptions would enable investors to exchange their ETF shares for the underlying Bitcoin instead of liquidating them into cash. The extension allows the SEC more time to review the proposal’s details and potential implications for the market.

This decision is crucial for the future of Bitcoin crypto ETFs, as in-kind redemptions could affect investors’ tax liabilities. The SEC is considering whether this process would benefit investors and the broader cryptocurrency market. The outcome of the decision could have far-reaching consequences for the structure of Bitcoin-focused crypto ETFs.

Ether Crypto ETF Redemption Delay

Similarly, the SEC has delayed its decision on in-kind redemptions for Bitwise’s Ether crypto ETF. If approved, this move would allow investors to redeem their Ether ETF shares for the actual Ether tokens instead of cash. The SEC’s delay reflects the complexity of the issue and the need for additional time to assess the rule change.

Like Bitcoin, in-kind redemptions in Ether crypto ETFs could bring tax advantages for investors by avoiding the need for liquidation. The SEC is evaluating whether such redemptions align with regulatory standards and the goals of market innovation. The delay indicates that the SEC is taking a cautious approach before making a final ruling on these proposals.