SEC Delays Bitwise BTC & ETH ETF In-Kind Creations Sept 2025
The US Securities and Exchange Commission (SEC) has extended its review of Bitwise Asset Management’s in-kind crypto ETF creation proposals for its Bitcoin ETF (BITB) and Ethereum ETF (ETHW), postponing a decision from July 25 to September 8, 2025. Under the in-kind crypto ETF creation model, authorized participants would exchange actual Bitcoin and Ethereum for ETF shares, mirroring traditional commodity funds and aiming to reduce slippage, streamline operations, and secure tax efficiencies. The SEC’s cautious stance, which also delayed BlackRock’s spot Ethereum ETF decision, reflects ongoing scrutiny over market manipulation, custody security, and operational complexity. Commissioner Hester Peirce maintains that in-kind creations for crypto ETFs are inevitable, while major managers such as 21Shares, Fidelity, WisdomTree, BlackRock, and VanEck pursue similar applications. Bitcoin trades near $118,900 and Ethereum around $3,360, indicating robust demand for regulated crypto ETFs. Approval of in-kind crypto ETF creations could enhance ETF liquidity, lower costs, and pave the way for advanced structures. Traders should monitor the updated timeline and regulatory shifts, as further delays may slow US crypto ETF innovation.
Neutral
In the short term, the SEC’s extension of its in-kind crypto ETF creation review may temper immediate upside for Bitcoin and Ethereum, as traders await a final decision rather than seeing outright approval. The delay suggests regulatory caution but not rejection, keeping hopes alive for more cost-efficient, tax-advantaged ETF structures. Over the long term, approval of in-kind creations could significantly boost liquidity, tighten spreads, and draw institutional capital into BTC and ETH markets, providing sustained support for prices. Given this balance—delay rather than denial—market reaction is likely muted, warranting a neutral categorization while participants monitor the revised September 2025 deadline.