The recent Securities and Exchange Commission decision to go back to Crypto ETF issuers to direct exchange of fund shares with Crypto ETF issues represents a structural upgrade rather than a retail revolution, analysts say.
Bloomberg’s Eric Baltunas calls the change a “piping fix,” noting that it makes no sense how daily investors interact with crypto exchanges and money they trade. “This does not mean that retailers can exchange IBIT for real Bitcoin,” he wrote to X.
The change announced Tuesday allows asset managers to exchange Crypto tokens directly for ETF shares, instead of using cash. Known as in-kind work and redemption, the move reduces conversion fees, improves price accuracy, makes ETFs more efficient, and ultimately benefits investors through lower costs and more stringent spreads.
The large institutions behind Crypto ETFs are already adopting new structures. On Thursday, Bitwise Asset Management announced that Bitcoin (BTC) and Ether (ETH) ETFs will begin offering in-kind creations and redemptions, and will become the first US crypto fund to implement the structure following the SEC’s July 29 ruling.
“It’s just a little better in the pipe,” Bulknath wrote, adding that former SEC chairman Gary Gensler is opposed to creations in kind due to concerns about potential funds “procured from bad places.”
sauce: Eric Balkunas
This move will bring Crypto ETFs closer together with traditional replacement products, cost-effective and operationally clean. According to Bitwise President Teddy Fusaro, this rule brings crypto funds to the “same foundation” used by institutions and ETFs.
“This move lays the foundation for deeper integration between digital assets and traditional financial systems,” Federico Brokate, US Business Director at 21Shares, told Cointelegraph.
Related: SEC approves Crypto ETPS’s real estate creation and redemption
US Bitcoin ETFs currently hold more than 6% of their total supply
As US Bitcoin ETFs continue to accumulate Bitcoin rapidly, SEC domination and movement from BitWise comes.
According to Bitbo data, 12 US Bitcoin ETFs currently hold 1,299,401 BTC, accounting for 6.18% of the total supply of 21 million coins.
BlackRock’s Bitcoin ETF Ishares Bitcoin Trust leads with a value of 740,601 BTC of $87,666 billion.
US crypto ETFs as of July 31, 2025. Source: Bitbo
Second place is the loyal, wise Origin Bitcoin fund, which values 205,864.2 BTC at around $24.37 billion. The Bitwise Bitcoin ETF holds 40,638.7 BTC, worth $4.81 billion.
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