qerranews 
Bitwise’s Bold ETF Upgrade
Bitwise Asset Management has introduced a significant update to its proposed ETFs for Dogecoin (DOGE) and Aptos (APT) by including in-kind redemptions, according to filings submitted on Thursday. The update follows a broader trend where US regulators are exploring flexible redemption mechanisms for crypto-based ETFs.
The new structure allows ETF investors to exchange shares for the underlying crypto tokens directly, instead of cash. This method — already common in traditional ETF markets — is now gaining attention in the crypto finance sector for its potential tax benefits and operational efficiency.
As interest in altcoin ETFs continues to grow, this strategic amendment could increase institutional participation and create a more investor-friendly structure for these funds.
Why In-Kind Redemptions Matter
In-kind redemptions allow ETF holders to redeem their shares for the actual crypto assets held by the fund, such as DOGE or APT, rather than receiving fiat currency. This mechanism is considered more tax-efficient, especially in jurisdictions where capital gains taxes may be triggered during cash transactions.
Key advantages of in-kind redemptions include:
- Tax optimization: Redemptions in-kind may not trigger a taxable event until the crypto is eventually sold.
- Lower trading costs: Avoiding market transactions can save on slippage and trading fees.
- Improved liquidity: Institutional traders can move in and out of positions more seamlessly.
These benefits make in-kind structures appealing not just to institutional investors, but also to retail participants seeking more efficient exposure to digital assets.
The SEC’s request for public feedback in February on in-kind models for Bitcoin and Ether ETFs showed growing regulatory acceptance. Now, Bitwise’s proposal could set a precedent for altcoin ETF design, especially if the SEC approves it.
SEC’s Changing Regulatory Stance
Historically, the SEC has exercised caution with cryptocurrency ETFs, often citing concerns around market manipulation, custody, and investor protection. However, momentum is shifting. In February 2025, the agency formally requested feedback on allowing in-kind creation/redemption mechanisms for spot Bitcoin and Ethereum ETFs — signaling regulatory progress.
During a panel hosted by the Bitcoin Policy Institute, SEC Commissioner Hester Peirce openly stated that in-kind redemptions for crypto ETFs are “on the horizon.” Her remarks reflect the agency’s growing openness to more sophisticated ETF structures.
This regulatory evolution is significant for companies like Bitwise, which has remained at the forefront of crypto fund innovation. By amending its DOGE and APT ETF proposals to include in-kind features, Bitwise not only aligns with these new expectations but also potentially accelerates SEC approval.
APT ETF Could Be Revolutionary
Among the two ETFs, the Aptos ETF holds particularly disruptive potential. Aptos, known for its high-performance Layer-1 blockchain, has been positioning itself as a competitor to Solana and Ethereum, particularly in terms of transaction throughput and developer experience.
Launching an APT ETF with in-kind redemptions could:
- Elevate Aptos’s visibility among institutional investors
- Offer new capital inflow opportunities for the Aptos ecosystem
- Bring mainstream validation to emerging Layer-1 protocols
Bitwise initially submitted its DOGE ETF application in January and the APT ETF filing in March 2025. These amendments are standard parts of the regulatory vetting process, allowing sponsors to refine fund structures, address SEC concerns, and improve investor appeal.
Incorporating in-kind redemption mechanisms signals not only Bitwise’s commitment to investor flexibility but also its readiness to lead as crypto ETFs become more mainstream.
Crypto ETFs Evolve Rapidly
The move by Bitwise adds to a rapidly evolving ETF landscape in the crypto market. As regulators warm up to altcoin-based funds, and sponsors gain confidence in sophisticated ETF mechanics, the future of crypto investing appears more structured and accessible.
Key developments to watch in 2025:
- SEC decisions on spot ETFs for altcoins like Solana and XRP
- The growing adoption of in-kind creation/redemption models
- Institutional demand for token exposure through compliant vehicles
Bitwise’s DOGE and APT ETFs are no longer just proposals — they are part of a growing class of instruments that could reshape how investors interact with digital assets. If approved, these ETFs may unlock a wave of product development across other Layer-1s, meme coins, and utility tokens.
Final Thoughts
With the inclusion of in-kind redemptions, Bitwise is sending a clear message: crypto ETFs must evolve in line with investor needs and regulatory frameworks. These amendments to the DOGE and APT ETFs position Bitwise as a forward-thinking leader in an increasingly complex financial landscape.
Whether you’re an institutional allocator or a retail investor, in-kind redemptions offer practical benefits that can significantly impact portfolio performance and tax efficiency.
As the SEC’s position softens and ETF design becomes more flexible, Bitwise’s innovation could pave the way for the next generation of crypto investment products.