Nasdaq Proposes Rule Change For BlackRock Bitcoin Trust

According to CoinDesk, Nasdaq has submitted a proposed rule change to the U.S. Securities and Exchange Commission (SEC) to permit in-kind creation and redemption for the BlackRock iShares Bitcoin Trust (IBIT). This process enables large institutional investors, known as authorized participants (APs), to directly buy and redeem shares of the fund using bitcoin (BTC) rather than cash. This method is considered more efficient as it allows APs to closely monitor the demand for the exchange-traded fund (ETF) and respond swiftly by buying or selling shares without involving cash transactions. However, retail investors are not eligible to participate in this process. Initially, when the SEC approved spot bitcoin ETFs, including IBIT, in January, the agency permitted the launch of these funds with cash redemption instead of bitcoin. Bloomberg Intelligence ETF analyst James Seyffart commented on the situation, noting that the approval should have been granted initially, but SEC officials, including Gary Gensler and Caroline Crenshaw, were hesitant due to various reasons, primarily their reluctance to allow brokers to handle actual Bitcoin. Despite these initial restrictions, BlackRock's IBIT has emerged as the largest spot BTC ETF in the market, drawing nearly $40 billion in inflows during its first year, marking it as the most successful ETF debut to date.