Cboe Proposes In-Kind Transactions For Bitcoin ETF And Ethereum ETFs

• Bitcoin ETFs attracted $1.76 Billion from January 21 to 24, 2025.
• Cboe BZX Exchange proposes in-kind transactions for ARK ETFs.
• The total net asset value of Bitcoin ETFs now stands at $123.06 Billion.

It all began with the approval of the first-ever Bitcoin ETF, where instead of in-kind transactions, it only allowed cash-based transactions. Despite that, the approval was the most important thing in 2024, for pro-crypto experts and enthusiasts.

The optimism from the first approval sparked a revolution in the crypto market. This transformed the landscape and paved the way for various firms to introduce their own unique ETFs.

However,as time moved forward, in this evolving space, now firms want to have in-kind transactions in their ETF products. In response to that, recently, the Cboe BZX Exchange, Inc. has recently submitted a 19b-4 proposal to the SEC.

This proposal aims to enable in-kind creations and redemptions for both the ARK 21Shares Bitcoin ETF and the 21Shares Core Ethereum ETF.

As the market continues to innovate, these developments could further shape the future of cryptocurrency investment.

Continue reading to know more.

Many ETFs Applications in Waiting as Trump 2.0 Kicks Off

As the U.S. Securities and Exchange Commission (SEC) prepared to approve spot Bitcoin ETFs in 2023, firms were busy hashing out the technical details of the redemption process for these products.

Initially, the SEC favored a cash model only. Which requires issuers to sell Bitcoin immediately after moving it from storage, returning cash to investors instead.

However, then the ETF came that had the capacity to invite tremendous liquidity. This move shifted the landscape, the SEC approved spot Bitcoin ETFs in January 2024, followed by spot Ethereum ETFs in May 2024.

The ETF market has since emerged as a formidable force, countering critics who previously downplayed its potential.

As a proof of that, BlackRock’s ETF has become the largest spot Bitcoin ETF, amassing nearly $40 billion in cumulative inflows since its launch in January, marking the most successful ETF debut on record.

In 2024, the SEC’s initial approvals for Bitcoin ETF and Ethereum ETFs permitted only cash-based transactions. Now, the industry is advocating for in-kind mechanisms.

Recently, 21Shares submitted a proposal to the SEC through Cboe BZX Exchange, seeking approval for in-kind creation and redemption processes for its ARK 21Shares Bitcoin ETF and 21Shares Core Ethereum ETF.

This proposal would allow authorized participants to exchange ETF shares directly for Bitcoin or Ethereum, rather than cash.

It follows a similar request from Nasdaq for BlackRock’s iShares Bitcoin Trust, which also aims to implement in-kind redemptions.

This shift indicates an evolution in both regulatory and operational approaches to crypto ETFs. The in-kind method is designed to enhance operational efficiency, enabling authorized participants to better align ETF supply with market demand while reducing costs.

Also, it would improve liquidity and operational flexibility for institutional investors managing these funds.

If approved, this proposed amendment could set a new standard for crypto ETF operations, potentially minimizing transaction friction and increasing efficiency for institutional investors.

Why Bitcoin Price Reaching $109K Linked to Bitcoin ETF?

Last week, Bitcoin ETFs saw an impressive surge in inflows, with data from Spot On Chain revealing that from January 21 to 24, 2025, they attracted a remarkable $1.76 Billion.

This influx of capital coincided with a post-inauguration rally, driving Bitcoin’s price to over $109,000. The primary driver of this surge was BlackRock’s Bitcoin ETF (IBIT), which alone accounted for an impressive $1.32 Billion in inflows.

Currently, the total net asset value of Bitcoin ETFs stands at $123.06 Billion, representing 5.92% of Bitcoin’s overall market cap. This influx has played a significant role in Bitcoin’s price rally, as institutional investors increasingly view Bitcoin as a hedge against inflation and economic instability.

As a result, the demand for ETFs that provide exposure to Bitcoin without the complexities of direct ownership is expected to continue growing.

Disclaimer

In this article, the views, and opinions stated by the author, or any people named are for informational purposes only, and they don’t establish the investment, financial, or any other advice. Trading or investing in cryptocurrency assets comes with a risk of financial loss.