CBOE Funds Push SEC for Physical Bitcoin ETF Subscription and Redemption Mechanism

On July 23, Bloomberg ETF analyst James Seyffart highlighted that five funds listed on the CBOE have recently submitted updated filings to the SEC, signaling ongoing regulatory dialogue and meticulous refinements. These revisions suggest progress toward implementing a physical subscription and redemption mechanism for crypto ETFs. This development is significant as it enhances the operational framework for authorized participants, including major Wall Street institutions and market makers, enabling them to directly exchange ETF shares for underlying Bitcoin or Ethereum spot assets. However, it is crucial to emphasize that this mechanism remains exclusive to these authorized entities, and retail investors are not permitted to engage in direct asset exchanges. This regulatory evolution underscores the SEC’s cautious yet constructive approach to integrating physical crypto assets within ETF structures, potentially improving market efficiency and liquidity for institutional players.