Bitwise Asset Management said it has completed the industry’s first in-kind creation and redemption for a spot Bitcoin exchange-traded fund, allowing an authorised participant to deliver Bitcoin directly in exchange for ETF shares rather than settling the trade in cash. Market participants say the shift to in-kind transactions could lower operational costs, narrow bid-ask spreads and reduce management fees by removing the need for issuers to convert cash into Bitcoin and vice-versa. The move also aligns the structure of Bitcoin funds with that of many commodity ETFs that already permit in-kind settlements. Bitwise’s step is expected to pressure rival spot Bitcoin ETF issuers to adopt similar mechanisms as they seek to attract institutional flows and deepen secondary-market liquidity.