Previously approved spot bitcoin and ether ETPs required participants to transact exclusively in cash, a structure that limited operational efficiency. Under the new orders, issuers can deliver or receive the underlying crypto assets directly, reducing transaction costs, narrowing bid-ask spreads and improving overall market liquidity.
In a broader move to support crypto-based investment products, the SEC also approved applications to list and trade an ETP holding both spot BTC and spot ETH, options and FLEX options on certain spot bitcoin ETPs, and increased position limits for those options up to the generic cap of 250,000 contracts.
These approvals mark a significant step toward a more mature and efficient U.S. crypto ETP market, enabling issuers and participants to leverage in-kind mechanisms that have long been standard in traditional commodity ETFs.