Nasdaq Updates Filing to Include In-Kind Redemptions for BlackRock Bitcoin ETF.

Nasdaq Seeks SEC Approval for In-Kind Redemptions in BlackRock Bitcoin ETF

Nasdaq has submitted a proposal to the U.S. Securities and Exchange Commission (SEC) requesting permission to introduce in-kind creation and redemption for the BlackRock iShares Bitcoin Trust (IBIT), according to a Friday filing.

In-kind transactions would enable authorized participants (APs)—institutional investors who handle the ETF’s liquidity—to exchange ETF shares directly for bitcoin (BTC), bypassing cash transactions. This method is regarded as more efficient, allowing APs to quickly adjust to changes in ETF demand. Retail investors remain excluded from this mechanism.

When spot bitcoin ETFs were approved in January 2024, including BlackRock’s IBIT, the SEC limited redemptions to cash-based transactions. Critics argue that this restriction hindered the fund’s operational efficiency.

“The SEC’s original reluctance to allow in-kind redemptions was tied to concerns about brokers handling bitcoin directly,” ETF analyst James Seyffart commented on X.

BlackRock’s IBIT has achieved unparalleled success since its launch, amassing nearly $40 billion in inflows within a year and becoming the largest spot bitcoin ETF. Nasdaq’s proposed rule change aims to optimize fund operations and attract further institutional participation.

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