Cboe BZX Proposes Rule Change for Invesco Galaxy's Bitcoin and Ethereum ETFs

According to PANews, Cboe BZX Exchange has submitted a proposed rule change to the U.S. Securities and Exchange Commission (SEC) on behalf of Invesco Galaxy. The proposal aims to allow physical creation and redemption of shares for its spot Bitcoin and Ethereum ETFs. This method enables direct exchange of the ETFs' underlying assets, Bitcoin or Ethereum, with ETF shares, bypassing the need for cash transactions. This approach eliminates the necessity for participants to sell the underlying cryptocurrency to create shares, reducing bid-ask spreads and avoiding additional brokerage fees. As the SEC reviews Cboe's proposed rule change, a public comment period has been initiated, allowing stakeholders to share their opinions before a final decision is made. The document states that authorized participants, institutions involved in the creation and redemption process, will be eligible to use the physical trading model. However, individual investors will still need to use a cash-based model when purchasing or redeeming ETF shares.