Bitcoin Spot ETF Applicants To Integrate Mandatory Cash Redemption Model
Summary
The SEC has implemented a new regulatory standard, called the Cash Redemption Model, for Bitcoin Spot ETF applicants. This model requires authorized participants to deposit funds in the ETF equal to the net asset value of the creation units. Invesco has adopted this model for its ETF, but may allow for in-kind transactions in the future. Blackrock has also modified its ETF application to include an in-kind redemption model called "Prepay," which allows cash instead of just Bitcoin to issue new fund shares. This modification aims to make it easier for banks to participate in the fund and provides greater protection against market manipulation.
