On today’s theme, Miguel Kudry of L1 Advisors breaks down the direct property of cryptocurrency funds versus exchanged and wrapped and how they are expected to evolve until 2025.
Then, Index Coop’s Enoch teams answer questions about the topic in Ask and Expert.
– Sarah Morton
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The lines between the spot cryptographic ETF and the direct property will blur in 2025
The year 2024 marked a fundamental moment for the cryptocurrency market with the launch of Bagcoin and Ether Stock Exchange (ETF) funds, quickly becoming some of the ETFs of faster growth in history. According to several reports, Global Crypto ETPS accumulated more than $ 134 billion in assets under administration (AUM) by November 2024. This success was remarkable even under the initial restriction of reimbursements and contributions from only effective in the United States, a condition imposed by the SEC during the approvals of 2024. However, the landscape evolves even more in 2025 with anticipated changes in the redemption mechanisms.
Change to channels in kind
The decision of the SEC in 2024 not to allow reimbursements and contributions in kind meant that ETF shares could only be used to buy or sell shares, which somehow limited the potential of these financial products. This restriction is about to change in 2025, with the expectations that regulatory bodies will allow in kind transactions for spot cryptographic ETF. Blackrock has already requested a rule change to enable refunds in kind for its Bitcoin ETF. This change will allow authorized participants to issue and exchange actions directly with Bitcoin or Ether instead of cash, which will create a new liquidity steering wheel between traditional finance ecosystems (tradfi) and decentralized finance (defi).
Impact on investors
The approach only in cash left billions in cryptocurrency assets on the margin. Crypto-national investors, particularly those with low-base assets, doubted their holdings into ETF due to substantial tax liabilities. With reimbursements in kind, these investors could transfer portions of their cryptographic wealth to ETF without the immediate tax burden, thus accessing a broader range of traditional financial services such as non -collateralized loans, mortgages and private banking.
For traditional investors who have acquired exposure to cryptocurrencies through ETF, change to channels in kind provides the opportunity to immerse themselves in the cryptographic ecosystem. These investors, having seen a significant appreciation in their holdings of ETF (Bitcoin, for example, were valued at around $ 46,800 at the time of the ETF launch in January 2024, and ether at approximately $ 3,422 in mid -July 2024 ), now you can turn your ETF actions into direct cryptographic holdings to explore Defi products without the need for new capital or face tax implications.
Catalysts for change
The recent Retirement of the Personnel Accounting Bulletin No. 21 (SAB-21) is another significant development. This will alleviate financial institutions to register digital assets such as liabilities in their balances, encouraging more banking banks and corridors to interact with cryptography custody and develop crypto-national financial products. An example of this trend is the recent coinbase launch of a loan product backed by Bitcoin in association with Morpho Labs, taking advantage of loans with Bitcoin. This year, we must expect to see a wave of traditional financial institutions following this path.
At the same time, a segment of investors gravitates towards the Autocustody, which prefers to administer its assets independently to access crypto-national products without intermediaries. This tendency underlines the importance of self -control solutions and easy to use in evolving cryptographic panorama.
The convergence of traffici and defi
2025 is emerging to be when the boundaries between traditional and decentralized finances become more and more blurred. With mechanisms such as transactions in kind and favorable regulatory changes, investors will probably interact with crypto-national platforms more perfectly, often inadvertently. This convergence is expected to improve entries in both sectors, increase the volume and create a more interconnected and liquid market.
In conclusion, the evolution of the ETF to direct property in the cryptographic space is not only about the election of investment, but about how these financial instruments are restructuring the behavior of investors and market dynamics. With reimbursements in kind on the horizon and regulatory changes such as the withdrawal of SAB-21, 2025 will mark a significant chapter by integrating cryptocurrencies into conventional finances, further blurring the lines between traditional financial rails and in the chain.
– Miguel Kudry, CEO, L1 Advisors
Ask an expert
Q. What distinguishes the cryptographic property from the traditional ETF chain?
Market access 24/7 is just the starting point. The property in the chain unlocks the true composition, which allows investors to use assets as a guarantee, gain performance and participate in decentralized ecosystems. While ETFs provide exposure, chain assets provide unique flexibility and utility.
Q. How does direct custody of cryptographic assets improve compared to ETFs?
Have you ever tried to transfer participations from one broker to another? How long did it take? Was it a friction nightmare? Probably. With cryptographic property in the chain, it has complete control. It can self -conflict their assets, deposit them with custodians and move them inside and out in minutes. What happens if an opportunity arises and you need to act quickly? You can get liquidity immediately selling or borrowing against your assets, without waiting, without problems, only action when necessary.
Q. Will the future agents prefer ETF or tokenized assets in the chain?
Imagine an AI agent who manages investments. To buy an ETF, you would need to navigate the KYC processes, work through the limited hours of a brokerage and depend on human intermediaries. Tokenized assets in the chain eliminate these barriers, offering 24/7 access, perfect automation and composability to maximize efficiency. For the Financial Systems promoted by the AI, the election will be clear: Defi.
– Crews Enochs, Ecosystem Growth Lead, Coop Index
Continue reading
- President Donald Trump signed a cryptographic order to establish a federal agenda aimed at bringing to US digital asset businesses to friendly supervision.
- The Bitcoin Strategic Reserve Law of Arizona moves to the next stage after the Senate Finance Committee approved it on Monday.
- The United States Senate on digital assets was formed, chaired by Wyoming Cynthia Lummis, the most vocal defender of Congress by the cryptocurrency.
