Featured image from iStock, chart from Tradingview.com<\/div>\n","protected":false},"excerpt":{"rendered":"
Recent reports have revealed that the United States Securities and Exchange Commission (SEC) has implemented a “new regulatory standard” for all Bitcoin Spot Exchange-Traded Fund (ETF) applicants while awaiting approval from the regulatory body. Cash Redemption Model For Bitcoin ETF Applicants Top Bloomberg Analyst James Seyffart took to X (formerly Twitter) to share the latest update by the regulatory watchdog. According to him, every Bitcoin Spot ETF applicant will have to bend their knees to this new model. The SEC’s latest “Cash Redemption Model” came amid the spot Bitcoin ETF issuers ironing their filings with the US regulator. It seems that the SEC is unwavering in its demand, rather than approve the different model that other issuers have suggested. Related Reading: Bitcoin Spot ETF Approval: Why Price Could Be Set For 300% Surge The model enables authorized participants to deposit funds in the ETF equal to the net asset value of the creation units to be created. The underlying assets, which in this case is Bitcoin, are subsequently purchased by the fund using this money. Seyffart’s X post was accompanied by another post from financial lawyer Scott Johnsson, who initially shared the update. The financial lawyer shared a screenshot which revealed more details about the new model by the regulatory body. Johnsson asserted that Invesco is the most recent company to adopt the cash creation and redemption standard for its ETF. The trust anticipates that “creation and redemption transactions will be made in cash at first.” However, in the future, the Trust may permit\/require creation and redemption transactions to be carried out with the \u201cin-kind\u201d model. This is the initial model that several ETF applicants have suggested. For the in-kind model, the participant deposits a collection of securities that are weighted and composed in accordance with the ETF’s portfolio. This will allow investors to receive creation units from the fund without having to sell the securities for cash instantly. Bloomberg Senior ETF analyst, Eric Balchunas has also confirmed Invesco’s adoption of the latest cash model. The analyst asserted that the firm is embracing the initiative as per its just updated S-1 filing. Blackrock’s In-Kind Redemption Model Blackrock recently adjusted its Spot Bitcoin Exchange-Traded Fund (ETF) application introducing an in-kind redemption model called “Prepay.” This is to tackle the restrictions that financial firms are facing in order to hold cryptocurrencies. Related Reading: $9 Trillion BlackRock Sees Bitcoin Spot ETF Approval Delayed, What This Means The adjustment aims to make it easier for Wall Street Banks to participate in the fund. With this modification, authorized participants (APs) would be allowed to issue new fund shares using cash instead of just Bitcoin.\u00a0 The funds that the APs use for this procedure can subsequently be converted into Bitcoin through an intermediary and kept in storage by the ETF’s custody provider. As a result of this, it provides access to banks that are unable to store cryptocurrencies directly.\u00a0 So far, Blackrock believes the model will offer greater protection against market manipulation, which has since been the major reason behind the SEC’s rejection of an ETF. Featured image from iStock, chart from Tradingview.com<\/p>\n","protected":false},"author":608,"featured_media":565416,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[3],"tags":[90876,428,86326,7720,1119,78790,89763,3799],"class_list":["post-565415","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","tag-aps","tag-bitcoin","tag-bitcoin-spot-etf","tag-blackrock","tag-btc","tag-btcusdt","tag-invesco","tag-sec"],"acf":[],"yoast_head":"\n
Bitcoin Spot ETF Applicants To Integrate Mandatory Cash Redemption Model<\/title>\n\n\n\n\n\n\n\n\n\n\n\n\n\n\t\n\t\n\t\n\n\n\n\n\n\t\n\t\n\t\n