Sep. 18, 2026
Dear Commissioners and Commission Staff, I am writing as an everyday individual retail investor and a proponent of transparent, fair, and accessible capital markets. The SEC's mission is threefold: protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation. While the approval of spot Bitcoin exchange-traded products marked a historic step forward, the current market structure inadvertently enforces an institutional double standard that actively disfavors everyday American savers. The Institutional Disparity in ETP Mechanics Currently, institutional market makers (Authorized Participants) operate with the privilege of direct in-kind creations and redemptions with physical Bitcoin at the trust level. This enables multi-billion-dollar institutions to toggle between native commodities and exchange-traded shares seamlessly, preserving capital efficiency and avoiding forced cash liquidations. In contrast, individual retail investors are strictly confined to secondary cash markets. If an everyday investor holding Bitcoin in private custody wishes to use that capital within traditional finance-such as pledging it as collateral for a brokerage margin line to manage cash flow or back investments-the regulatory architecture forces a complete liquidation to fiat first. This arbitrary barrier triggers immediate capital gains tax friction, eroding personal savings simply because the investor is not an institutional desk. The Opportunity: A Regulated, Two-Way Retail Bridge Rather than forcing retail broker-dealers to independently build complex, disparate custody models for raw cryptographic keys, the Commission should utilize the existing, highly regulated exchange-traded fund wrapper as a two-way conduit: Authorize Retail-Sized In-Kind Mechanisms: Encourage and permit ETP sponsors to offer retail-accessible creation and redemption portals for fractional digital asset quantities (e.g., satoshi-level deposits and withdrawals). Support Tax-Neutral Custody Treatment: Coordinate regulatory guidance confirming that transferring self-custodied property to a regulated grantor trust in exchange for registered shares-and redeeming those exact assets back to self-custody-is a change in custody form rather than a taxable disposal. Preserve Dollar Stability and Market Integrity: This model maintains standard fiat accounting and SIPC protections across brokerages while granting individual savers the freedom to move sovereign property into registered collateral when needed, and retrieve it once their obligations are settled. Expanding Financial Tools for the Working American For generations, sophisticated credit lines, prime brokerage leverage, and direct asset ownership were reserved for elite institutions. Bitcoin has democratized access to pristine, bearer property for everyday working people. The Commission's regulatory framework should focus on opening and modernizing these bridges, allowing ordinary Americans to utilize the same tools, efficiencies, and protections that Wall Street firms take for granted. Thank you for your consideration of this critical enhancement to modern market structure. Sincerely, Robert Himes Rock Township, WI