Nasdaq Seeks SEC Approval for In-Kind Redemptions in BlackRock Spot Bitcoin ETF
Nasdaq has submitted a proposed rule change to the U.S. Securities and Exchange Commission (SEC) to introduce in-kind creation and redemption for the BlackRock iShares Bitcoin Trust (IBIT), according to a Friday filing.
The proposed process would allow authorized participants (APs)—large institutional investors—to directly create and redeem shares of the ETF using bitcoin (BTC) instead of cash. This mechanism is expected to enhance efficiency, enabling APs to respond to ETF demand more rapidly without involving cash transactions. Retail investors, however, would remain excluded from participating in this process.
When the SEC approved spot bitcoin ETFs, including IBIT, in January 2024, only cash redemptions were permitted. The restriction was reportedly implemented to prevent brokers from directly handling bitcoin.
“It should have been approved in the first place, but Gensler/Crenshaw didn’t want brokers touching actual Bitcoin,” Bloomberg Intelligence ETF analyst James Seyffart commented on X, referencing SEC Chair Gary Gensler and Commissioner Caroline Crenshaw.
BlackRock’s IBIT has emerged as the largest spot bitcoin ETF, drawing nearly $40 billion in inflows within its first year. This milestone solidified its status as the most successful ETF debut in history.
