Galaxy Powers Crypto ETFs
Galaxy & the Evolution of In-Kind Crypto ETF Market Structure
How leading crypto ETFs – including BlackRock’s iShares Bitcoin Trust – are adopting in-kind mechanisms to enhance market efficiency
When spot bitcoin ETFs launched in the U.S., they marked a major milestone in crypto’s integration into traditional finance. But access alone doesn’t define success. How efficiently an ETF trades once it’s live matters just as much.
That efficiency is shaped by market structure including liquidity, execution quality, and the mechanics through which ETF shares are created and redeemed.
Following regulatory approval for in-kind creations and redemptions last year, leading crypto ETFs, including BlackRock’s iShares Bitcoin Trust (Nasdaq: IBIT), have adopted in-kind mechanisms that most closely align digital asset products with the market structure used across traditional equity and fixed income ETFs.
Historically, spot crypto ETFs relied on cash-only creations and redemptions. In-kind functionality allows authorized participants, acting in their own capacity, to exchange bitcoin and other cryptocurrencies directly for ETF shares—the same proven mechanism used across equity and fixed-income ETFs. While the shift may sound technical, it represents a meaningful evolution in how crypto ETFs function: helping tighten bid-ask spreads, reduce transaction friction, and place crypto ETFs on the same structural footing as the ETFs investors already rely on.
Galaxy’s role in crypto ETF market infrastructure
Galaxy operates at the intersection of digital asset markets and traditional financial market structure. Galaxy maintains relationships with a broad range of market participants, including authorized participants, and leverages a global network of counterparties (over 1,500 around the world) to provide liquidity, market insight, and operational support across digital asset markets that intersect with ETF structures.
In practice, Galaxy may provide market expertise, liquidity access, and operational coordination services to counterparties engaging in digital asset transactions that occur alongside authorized participant creation and redemption processes for crypto ETFs. By operating in this capacity, Galaxy supports efficient market functioning.
“We’ve seen tremendous demand from clients to be able to hold some or all of their bitcoin exposure within the convenience of an ETP, allowing that exposure to sit directly within an existing brokerage or financial advisor account,” said Robert Mitchnick, Head of Digital Assets at Blackrock. “Galaxy Digital has been a pioneer in helping clients navigate the conversion process.”
By working alongside authorized participants and other market participants, Galaxy helps support execution quality and market efficiency without acting as an authorized participant or sponsor distributor .
“Supporting in-kind activity is a natural extension of Galaxy’s role bridging digital assets and traditional finance,” said Michael Harvey, Head of Franchise Trading at Galaxy. “By working alongside authorized participants, we’re helping reinforce the efficiency and resilience of the crypto ETF ecosystem using the same proven mechanics that underpin traditional ETFs.”
Connecting crypto liquidity to ETF markets
Galaxy has spent years operating in complex crypto markets, providing liquidity, managing risk, and executing in environments where precision matters. That experience translates directly to today’s crypto ETF landscape, where institutional infrastructure and disciplined market design are essential.
As more crypto ETFs come to market, Galaxy supports the development of institutional-grade crypto liquidity with ETF ecosystems, strengthening the bridge between onchain assets and traditional financial markets. It’s part of Galaxy’s broader mission to make crypto markets more durable, efficient, and accessible.
“What we’re seeing is crypto ETFs maturing into true institutional products,” said Steve Kurz, Global Co-Head of Digital Assets at Galaxy. “By helping apply in-kind mechanics and traditional ETF market structure to digital assets, Galaxy is supporting a more efficient, scalable, and investor-friendly ecosystem.”
Learn more about Galaxy’s capabilities here. To speak with someone at Galaxy, contact our team.
DISCLOSURES
This document, and the information contained herein, has been provided to you by Galaxy Digital Holdings LP and its affiliates (“Galaxy Digital”) solely for informational purposes. This document may not be reproduced or redistributed in whole or in part, in any format, without the express written approval of Galaxy Digital. Neither the information, nor any opinion contained in this document, constitutes an offer to buy or sell, or a solicitation of an offer to buy or sell, any advisory services, securities, futures, options or other financial instruments, or to participate in any trading strategy. Nothing contained in this document constitutes investment, legal or tax advice and it should not be relied upon as such or is an endorsement of any of the digital assets mentioned herein. You should make your own investigations and evaluations of the information herein. Any decisions based on information contained in this document are the sole responsibility of the reader. References to BlackRock and its iShares Bitcoin Trust are provided for informational purposes only, and Galaxy Digital does not sponsor, issue, distribute, or underwrite shares of any exchange-traded fund, including BlackRock’s iShares Bitcoin Trust.
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