Bitcoin ETF applicants must sport cash redemption model
The United States SEC is showing a clear preference for a cash redemption model in spot Bitcoin ETFs. Notably, Invesco and Galaxy Digital have recently updated their filings to align with this model, indicating a broader industry shift. This development was highlighted on Dec. 14 by finance lawyer Scott Johnsson. The updated S-1 filings of these firms now show a commitment to cash transactions to create and redeem ETF shares. This move signals a significant pivot in handling Bitcoin ETFs, contrasting with the in-kind redemption model proposed by firms like BlackRock. I think everyone is gonna have to bend the knee to cash creates and redeems. https://t.co/1z9HknHyAG — James Seyffart (@JSeyff) December 13, 2023 The distinction between these two models lies in their operational mechanics. In a cash creation model, participants deposit cash equivalent to the net asset value of the created ETF units, which the fund then uses to purchase assets like Bitcoin (BTC). On the oth...