What to know:
- Bloomberg reports some large holders are using in-kind creations to move BTC into spot ETFs without selling. Because why just hold BTC when you can hold ETFs and pretend you’re playing by the rules? 🤷♂️
- BlackRock says it has processed more than $3 billion of conversions, and Bitwise and Galaxy report growing client interest. Because nothing says “financial innovation” like turning crypto into a tax-optimized paperweight. 📄✨
- The shift follows the SEC’s July 29 order allowing in-kind flows for crypto ETPs, aligning bitcoin and ether products with commodity ETPs. Because nothing says “alignment” like suddenly realizing you’ve been treating crypto like a commodity all along. 🤯
Some large bitcoin holders are moving coins into spot exchange-traded funds through in-kind creations, converting off-platform BTC into brokerage-account assets they can borrow against or include in estate plans, Bloomberg reported Tuesday. A masterclass in financial jargon so opaque it could double as a will. 📜
The mechanics rest on a summer policy shift. Because of course they do-nothing good ever comes from a simple Tuesday in July. 🌞
On July 29, 2025, the U.S. Securities and Exchange Commission (SEC) announced the decision to approve orders allowing in-kind creations and redemptions for crypto-asset exchange-traded product (ETP) shares, a policy which covers spot bitcoin exchange traded funds (ETFs). Because why let the facts get in the way of a perfectly good regulatory maze? 🌀
The agency called the change a break from earlier cash-only approvals for spot bitcoin and ether and an alignment with long-standing practice for commodity ETPs. Because nothing says “long-standing practice” like retroactively inventing tradition. 🏛️
In practice, the SEC said authorized participants can deliver or receive the underlying asset, rather than cash, when creating or redeeming ETP shares. SEC Chair Paul Atkins said the shift would make products “less costly and more efficient,” while Trading and Markets Director Jamie Selway called it an “important development” that adds flexibility for issuers and investors. Because nothing says “flexibility” like a regulatory framework so rigid it could crack under the weight of its own bureaucracy. 🏭
Against that backdrop, Bloomberg reported that some whales are handing BTC to ETFs and receiving fund shares without selling, a structure the outlet noted is generally tax-neutral because no sale is recorded. The exposure stays the same, but it appears in a brokerage account where it can be pledged as collateral or folded into estate planning, Bloomberg said. Because nothing says “estate planning” like leaving your heirs a puzzle wrapped in a riddle. 🧩
Activity is already visible, Bloomberg reported. BlackRock has facilitated more than $3 billion of such conversions, its head of digital assets Robbie Mitchnick said. Because nothing says “digital assets” like moving them into a format that looks like something your grandma’s stockbroker would understand. 🧓💼
Bitwise told Bloomberg it is getting daily inquiries from clients who want holdings reflected on wealth platforms. Galaxy has processed a handful of transactions, Bloomberg added, citing Michael Harvey. Because nothing says “wealth” like pretending your crypto is now a spreadsheet. 🚀
Some clients shift only a slice of holdings; a “subset” consolidates entirely because “it’s the easiest way” to hold going forward, Mitchnick told Bloomberg. Easy, sure. Like herding cats with a spreadsheet. 🐱📊
Bitwise President Teddy Fusaro said there are “benefits of having things in the traditional financial system,” including how clients are serviced by private banks. Because nothing says “traditional” like a system that’s never seen anything like crypto before. 🏦
Banks already play a limited role in facilitating these trades – particularly on creations – even as only non-bank broker-dealers can currently complete the full process, Bloomberg added. Because nothing says “efficiency” like a process that requires three separate entities to agree on the time zone. 🕒
Neither BlackRock, Bitwise nor Galaxy immediately responded to CoinDesk’s request for comment. Because nothing says “transparency” like a press release followed by radio silence. 📢
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2025-10-22 15:32