The SEC Notification on Bitcoin ETFs
The U.S. Securities and Exchange Commission (SEC) has recently notified all spot Bitcoin Exchange-Traded Funds (ETFs) applicants. Their final prospectuses must exclusively focus on the “Cash Creates” model rather than the “in-kind” model.
Alleged Satoshi Memo and Analysts’ Reactions
A Twitter account claiming to be Satoshi Nakamoto, Bitcoin’s creator, posted a memo emphasizing preserving Bitcoin’s original programming integrity. Some analysts speculate the release of Bitcoin ETFs could mark the end of Bitcoin.
However, Bloomberg analyst James Seyffart dispelled these speculations. In a recent Twitter post, he referred to specific individuals as ‘uninformed’ and ‘gullible’ for their misconceptions about the impact of ETFs on Bitcoin. Seyffart strongly asserts that “Spot Bitcoin ETFs WILL hold Bitcoin.”
Understanding the Two Models: In-Kind vs. Cash Creates
To understand the distinction between the “in-kind” and “Cash Creates” models, let’s look at the processes involved in each:
Cash Creates Model Adoption by Major Firms
Major financial firms like WisdomTree and BlackRock have already implemented the cash-create model.
Hot Take
The SEC’s mandate for Bitcoin ETFs to focus on the “Cash Creates” model has sparked speculation about the impact on the original programming integrity of Bitcoin. However, analysts like James Seyffart assert that ETFs will indeed hold Bitcoin and not adversely affect its original programming. As major firms adopt the cash-create model, the implications of this shift in redemption model remain to be seen.
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