- SEC extends deadline for Bitwise ETF redemption plan
- Proposal includes in-kind redemptions for Bitcoin and Ethereum ETFs
- New decision date set for September 8, 2025
The U.S. Securities and Exchange Commission (SEC) has again delayed its decision on Bitwise’s proposal to allow in-kind redemptions for its Bitcoin and Ethereum ETFs. Originally anticipated sooner, the new decision deadline is now September 8, 2025.
This delay keeps investors and ETF issuers in suspense as Bitwise seeks regulatory approval for a model that could improve fund efficiency and reduce tax liabilities.
Why In-Kind Redemptions Matter for Crypto ETFs
In traditional finance, in-kind redemptions let ETF shareholders exchange their fund shares for the underlying assets instead of cash. Bitwise aims to bring this structure to its Bitcoin and Ethereum ETFs, enabling institutional investors to redeem ETF shares directly for cryptocurrency.
Such a setup can minimize tax consequences and lower transaction costs, offering a more efficient and investor-friendly model than the current cash-based system.
This method is especially beneficial in the volatile crypto market, where direct asset transfers are often preferable to fiat conversions, which can incur higher fees and delays.
SEC’s Continued Caution
While no specific reason was given for the delay, the SEC stated it needs more time to evaluate Bitwise’s proposal. The agency has historically been cautious with crypto-related products, especially when they involve novel mechanisms like in-kind transactions.
A green light from the SEC would mark a major milestone not just for Bitwise but for the broader crypto ETF ecosystem. It could encourage other ETF issuers to follow suit, paving the way for more flexible and tax-efficient crypto investment vehicles in the U.S. market.
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