Prep the Pan: Spray an 8-inch square baking pan with nonstick cooking spray.

Melt the Butter and Marshmallows: Select the "normal" saute setting on the Instant Pot. Add the butter to the insert pot. Stir occasionally until melted. Don't brown. Once the butter melts, reduce saute setting to "low". (On some models, you need to turn on the Instant Pot and turn it on again to do this.) Add the Peeps. Stir until melted. 

Add the Cereal: Turn off the Instant Pot. Add the cereal. Stir to combine. Transfer the mixture to the prepared pan. Lightly wet your hands with cool water. Quickly press down the mixture. Top with sprinkles (optional). Allow bars to set for an hour. Cut into 12 squares.