SEC Requires Cash Redemptions for Bitcoin ETFs, Increasing Costs and Friction
• The SEC is requiring Bitcoin ETFs to conduct redemptions in cash rather than in-kind with Bitcoin, which will increase costs.
• In-kind redemptions are standard practice for other ETFs and allow transactions directly with the underlying asset.
• Requiring cash redemptions for Bitcoin ETFs will make them more expensive and less efficient.
• The SEC may be trying to limit opportunities for manipulation or self-dealing.
• The SEC chair may also be trying to make Bitcoin ETFs less attractive after being forced to approve them.