Cboe Proposes Regulatory Change for Bitcoin and Ethereum ETFs to SEC
- Bitcoin and Ethereum ETFs may start operating with cash transactions.
- Change aims at cost efficiency and alignment with underlying assets.
- Cboe’s proposal reflects efficiency trends in the ETF industry.
Cboe Global Markets has filed a formal request with the U.S. Securities and Exchange Commission (SEC) to change the operating structure of its Bitcoin and Ethereum ETFs. The focus of the change is to allow creation and redemption transactions for these funds to be conducted in cash, a move that seeks to increase efficiency and reduce associated costs for investors.
This proposal directly affects two financial products: the ARK 21Shares Bitcoin ETF (ARKB) and the 21Shares Core Ethereum ETF (CETH). According to Cboe, the proposed modification could bring significant improvements in terms of costs and tax efficiency, also aligning the prices of the ETFs with the value of their underlying assets.
🇺🇸 CBOE JUST FILED FOR IN-KIND REDEMPTIONS FOR SPOT the #BITCO ETF'S 🤯
THIS IS HUGE 🚀 pic.twitter.com/jvhPsXxmtf
— Vivek⚡️ (@Vivek4real_) January 27, 2025
The Cboe BZX exchange is proposing a regulatory change to allow shares of the ARK 21Shares Bitcoin and 21Shares Core Ethereum ETFs to be listed and traded on the exchange.
ETFs, in this case, are investment vehicles that allow investors to trade shares representing underlying assets, in this example Bitcoin and Ethereum, without needing to directly own those cryptocurrencies. The proposed changes aim to allow “in-kind” creations and redemptions of these ETFs, meaning that transactions can be made directly with the cryptocurrencies rather than cash, offering a more direct and potentially more efficient method of trading.
This proposed change is important because it reflects the growing integration of cryptocurrencies into the traditional financial regulatory framework, facilitating the entry of institutional investors into the crypto asset market. Approval of this change could positively influence the liquidity and stability of these ETFs, as well as set a precedent for future offerings of similar products on other exchanges and markets.
The SEC’s decision on Cboe’s proposal could signal a significant step forward in how crypto ETFs operate, potentially bringing more efficiency and benefits to investors. The move also highlights the growing role that crypto-backed ETFs are playing in the broader financial landscape.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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