Grayscale opens in-kind investing across 10 crypto ETPs

In-kind creation and redemption is standard for commodity ETFs but was barred for crypto products when the first spot Bitcoin ETFs launched in January 2024, after the SEC insisted on cash-only creation to limit custody and settlement risk. Grayscale itself converted its flagship GBTC trust into an ETF that year under that same cash-only model, leaving large holders unable to contribute tokens directly.

Investors who already hold Bitcoin, Ethereum, Solana or XRP can now hand those tokens to Grayscale and receive fund shares, skipping a taxable sale and the market impact of converting large positions to cash first. The minimums run from $80,300 to $364,800 per fund, so the mechanism favors authorized participants and institutional holders over retail buyers, who still enter and exit through ordinary brokerage trades.

Commodity ETFs have long used in-kind transfers to keep costs down and tracking tight; applying the same plumbing to crypto tests whether regulators now see these ten products as similar enough to gold or oil funds to drop the cash-only safeguard. Rivals that still require cash creation, including BlackRock's IBIT, face pressure to match Grayscale or explain why their own products remain more expensive to operate. (per cryptobriefing.com)

Watch whether the SEC lets other issuers, not just Grayscale, file for in-kind creation on their spot Bitcoin and Ethereum ETFs, since a broad rule change rather than a single-issuer exemption would signal a lasting shift in how the agency treats crypto ETPs. Any pushback or amendment to Grayscale's exemptive relief would show the regulator is still testing the model rather than endorsing it outright.