The U.S. Securities and Exchange Commission (SEC) made a groundbreaking decision early Wednesday to approve the physical redemption mechanism for Bitcoin (BTC) and Ethereum (ETH) spot ETFs. This move is seen as another significant "institutional upgrade" of the U.S. regulatory framework for encryption assets following the approval of spot ETFs.

This move marks the official recognition of BTC and ETH as being on par with traditional mainstream assets like gold, providing a crucial "final piece of the puzzle" for global institutions to compliantly allocate encryption assets.

SEC Chairman Paul S. Atkins issued a statement indicating that the regulatory agency is adjusting its philosophy to better accommodate the unique nature of the encryption market. He emphasized that the SEC's goal is to establish a regulatory framework that is both appropriate and reasonable for the cryptocurrency asset market. Atkins also noted that the introduction of a physical redemption mechanism will help reduce the operational costs of ETFs, improve market efficiency, and ultimately benefit all investors.

This decision clearly indicates that the SEC is shifting from its previous defensive regulatory strategy to a more constructive regulatory approach. At the same time, it also means that the regulatory agency has recognized BTC and ETH as commodity-like assets, and in the future, they will be regulated in a manner similar to exchange-traded products (ETPs) for commodities.

Analysts believe that this regulatory breakthrough will inject new vitality into the encryption asset market, potentially attracting more institutional investors and further promoting the mainstreaming of the encryption economy. However, they also remind investors that despite the improving regulatory environment, the encryption asset market still exhibits high volatility, and it is essential to carefully assess risks when investing.

With the SEC's latest move, the cryptocurrency asset market is experiencing a critical turning point. This not only paves the way for the long-term development of BTC and ETH but also paints a brighter future for the entire encryption ecosystem.