A director of digital assets strategy at asset management firm Vaneck says the U.S. Securities and Exchange Commission (SEC)’s cash-only requirement for spot bitcoin exchange-traded funds (ETFs) is “nonsense.” He predicted that it would not hold out for long since publicly listed companies already hold billions of dollars in bitcoin on their balance sheets.
‘The Cash-Only Create/Redeem Requirement for the Bitcoin ETPs Is Kabuki Theatre’
Gabor Gurbacs, director of Digital Assets Strategy at asset management firm Vaneck, thinks it’s “nonsense” for the U.S. Securities and Exchange Commission (SEC) to require spot bitcoin exchange-traded fund (ETF) issuers to use the cash creation method instead of the in-kind model for their crypto exchange-traded products (ETPs). The executive stated on social media platform X Thursday:
The cash-only create/redeem requirement for the bitcoin ETPs is Kabuki theatre … It’s nonsense to restrict bitcoin ETPs to cash only.
“Publicly listed companies already hold $ billions of bitcoin on their balance sheets, some transferred from trading platforms, others mined, etc.,” he added.
The Vaneck director proceeded to praise Hong Kong for allowing both the cash and in-kind models for spot bitcoin ETFs. “Gotta love that even Hong Kong SAR (China) is more open-minded than U.S. regulators. The competition is on. Relaxing rules will lead to a capital/competitive advantage,” the director opined. This week, the Hong Kong Securities and Futures Commission (SFC) published rules for funds to launch spot bitcoin ETFs using both the cash and in-kind methods.
The SEC is currently considering 13 spot bitcoin ETF applications, including one from Vaneck. The securities regulator recently held several meetings with various issuers, pushing for them to use the cash creation method if they want to be included in the first batch of spot bitcoin ETF decisions.
Gurbacs further shared:
Given that public companies hold bitcoin from various sources, I wouldn’t expect cash-only creates to hold out for too long. In-kind creations and redemptions are simply much more efficient and better for investors … Issuers will fight for it.
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