Institutional Interest Grows in New Crypto ETFs
By: Eva Baxter
The institutional interest in cryptocurrency continues to rise, reflecting in new developments spearheaded by notable firms such as Cboe and Tuttle Capital. Cboe has filed an amendment with the US Securities and Exchange Commission (SEC) aiming to introduce in-kind creations and redemptions for their Ark21 Shares Bitcoin ETF (ARKB) and 21Shares Core Ethereum (CETH) exchange-traded funds (ETFs). This new maneuver suggests a strategic move to optimize and possibly reduce the tax burdens linked with cash-based redemptions typically favored by the SEC.
The proposed in-kind method would allow ETFs to process investor redemptions using the underlying digital assets, a feature reserved for authorized participants. Cboe's shift could potentially improve market liquidity and reduce the sale-for-cash requirement presently raising operational costs and tax inefficiencies. This filing complements Nasdaq’s latest applications concerning BlackRock’s iShares Bitcoin ETF, suggesting a unified institutional push toward broader crypto ETF adoption amid changing regulatory landscapes.
Meanwhile, Tuttle Capital Management has joined the fray by reaching out to the SEC for approval of its innovative range of leveraged ETFs targeting ten different cryptocurrencies, including well-known tokens like XRP, Cardano, and Polkadot. These proposed financial instruments, if approved, offer 2x leverage, allowing investors to capitalize on short-term market shifts with doubled daily gains — or losses. The concept harnesses a high-risk, high-reward investment strategy that amplifies exposure to the underlying assets.
These filings also mark potential firsts for Chainlink, Cardano, and Polkadot ETFs, enhancing the selection available to crypto investors. Industry experts, such as Bloomberg's Eric Balchunas, suggest that these products might enter the market by April, depending on SEC's response. Given the proposed ETFs' distinct economic effects and comprehensive strategic support by industry leaders, the financial landscape may be on the brink of significant evolution as established players push for crypto integration.
