United

Bitcoin ETF

Bitcoin

Spot

Recent reports have revealed that the United States Securities and Exchange Commission (SEC) has implemented a “new regulatory standard” for all <a href="https://www.newsbtc.com/news/bitcoin/spot-bitcoin-etf-odds-100-matrixport/" target="_blank" rel="noopener ">Bitcoin Spot Exchange-Traded Fund (ETF)</a> applicants while awaiting approval from the regulatory body. 
<h2 id="cash-redemption-model-for-bitcoin-etf-applicants">Cash Redemption Model For Bitcoin ETF Applicants</h2> 
Top Bloomberg Analyst James Seyffart took to X (formerly Twitter) to <a href="https://x.com/JSeyff/status/1735079494002585844?s=20" target="_blank" rel="noopener nofollow">share</a> the latest update by the regulatory watchdog. According to him, every <a href="https://www.newsbtc.com/analysis/btc/bitcoin-price-rips-higher-43k/" target="_blank" rel="noopener ">Bitcoin</a> 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. 
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 <a href="https://x.com/SGJohnsson/status/1735067054636507257?s=20" target="_blank" rel="noopener nofollow">post </a>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 <a href="https://www.newsbtc.com/news/bitcoin/bitcoin-spot-etf-dtcc/" target="_blank" rel="noopener ">Invesco</a> 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 “in-kind” 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 <a href="https://x.com/EricBalchunas/status/1735082333542232211?s=20" target="_blank" rel="noopener nofollow">confirmed</a> 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. 
<h2 id="blackrock-s-in-kind-redemption-model">Blackrock’s In-Kind Redemption Model</h2> 
Blackrock recently <a href="https://www.sec.gov/comments/sr-nasdaq-2023-016/srnasdaq2023016-303319-781202.pdf" target="_blank" rel="noopener nofollow">adjusted</a> 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. 
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.&nbsp; 
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.&nbsp; 
So far, <a href="https://www.newsbtc.com/news/bitcoin/bitcoin-price-stalls-blackrock-sec-talks/" target="_blank" rel="noopener ">Blackrock</a> 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. 
<img loading="lazy" decoding="async" class="size-medium" src="https://www.tradingview.com/x/u0J29VLa/" alt="Bitcoin" width="2273" height="1351">

Bitcoin Spot ETF Applicants To Integrate Mandatory Cash Redemption Model

Table of Contents

NewsBTC

Other articles published on Dec 14, 2023

Sea Summit, The Event that Could Paralyze the Crypto Ecosystem

Here's How to Be a Millionaire When Avalanche (AVAX) Hits $50

Flipster Debuts ‘The Dragon's Treasure’ Trading Competition Series with 1 million USDT worth of p...

Inilah 5 Fase Penting yang Perlu Diamati Terkait Bitcoin Halving

Bonk coin’s 52% surge: Could it be the next big crypto?

Brazil Expansion Is “Central Focus” for Coinbase

Join our free newsletter for daily crypto updates!