The SEC Just Quietly Supercharged Crypto ETFs

In-kind redemptions are live. Ethereum staking might be next. Welcome to Wall Street’s crypto glow-up.

🔧 Quick Stats

• ✅ What’s New: SEC approves in-kind redemptions for crypto ETFs
• 💸 Why It Matters: ETFs can now issue/redeem shares using actual crypto (BTC/ETH), not just cash
• 🧾 Staking Next?: Nasdaq’s ETH staking filing just got acknowledged
• 📈 ETH ETF Inflows: 18 days straight of net buys, 5.4B total
• 📉 Impact: Lower fees, tighter spreads, faster settlement, better tracking
• 🪙 Bonus: Options and hybrid ETFs also approved

🚪 The SEC Just Opened the Efficiency Floodgates

On July 30, the U.S. SEC made a quietly historic move: it approved in-kind creations and redemptions for spot crypto ETFs. Translation? Big institutional players can now swap shares of Bitcoin and Ethereum ETFs for the real assets — no more detours through cash.

It’s not flashy, but it’s seismic.

This tweak brings crypto ETFs into line with how traditional ETFs work — making them faster, cheaper, and more liquid.

“It’s a plumbing fix,” said Bloomberg ETF whisperer Eric Balchunas. “But damn good plumbing.”

🧠 Why In-Kind = Big-Brain Move

Here’s what this change unlocks:

• No more middleman fees on trading BTC/ETH for cash
• Real-time redemptions, not delayed settlements
• Accurate pricing, tighter tracking to BTC/ETH spot
• Smoother liquidity, with tighter bid-ask spreads

This is how big ETF players have always wanted it. Now they get it. And that could mean more flows, more products, more yield — and more mainstream adoption.

🪙 Staking: The Next Domino to Fall?

ETF experts are already looking ahead. The next big win? Staking inside ETH ETFs.

Nate Geraci president of ETF Store and resident oracle of ETF Twitter, dropped this:

“SEC acknowledged the Nasdaq filing for ETH staking. My guess? It’s next. Sooner rather than later.”

If staking is approved, ETH ETFs could go from passive exposure to yield-bearing assets — a direct competitor to bonds and money markets.

That’s not just a better ETF. That’s a better product for retirement accounts, institutions, and DeFi-curious allocators.

⚙️ ETF Innovation Spree: The SEC Is Unchained

This wasn’t a one-off. The SEC also greenlit:

• Hybrid Bitcoin + Ethereum ETFs
• Options on spot BTC ETFs
• FLEX options (custom-structured ETF derivatives)

That’s not caution. That’s acceleration.

Wall Street’s ETF infrastructure is being rebuilt around crypto — not as a risk, but as a real, regulated asset class.

📈 Ethereum’s Spotlight Moment

Let’s talk ETH:

• 5.4 billion in ETH ETF inflows (and counting)
• 18 straight days of net capital inflow
• Staking yields between 4.2%–6.5%
• And now? In-kind redemptions + staking on deck

Ethereum is evolving from a "tech bet" into a yielding, institutional-grade financial primitive. And the ETF market is quietly positioning for it.

🧩 Why This All Matters

Crypto ETFs used to be the kids’ table. No longer.

With in-kind redemptions, they now work just like the big TradFi funds. And if staking is approved, Ethereum ETFs will offer yield + exposure, putting them head-to-head with Treasuries, REITs, and dividend-paying stocks.

This is a foundational shift in how capital markets view crypto — not just speculative, but structural.

💥 TL;DR

• The SEC just approved in-kind redemptions for crypto ETFs. That’s huge.
• ETFs now settle with real BTC/ETH — faster, cheaper, tighter tracking.
• Ethereum ETFs are seeing strong inflows (5.4B) and staking may be next.
• Hybrid ETFs, options, and FLEX products also got greenlit.
• Crypto ETFs are no longer test cases — they’re infrastructure.
• The next unlock: staking = yield = game on.