NASDAQ has filed a proposed rule change to allow the creation of in-kind and redemption for the BlackRock Ishares Bitcoin Trust (IBIT), according to a Friday filing with the US Securities and Exchange Commission (SEC).
The process enables large institutional investors, called authorized participants (APS), to buy and redeem the fund’s shares directly for Bitcoin (BTC).
It is considered more efficient as it allows APS to closely monitor demand for the ETF and to act quickly by buying or selling shares in the fund without cash being involved in the process. Retail investors are not eligible to participate.
When the SEC first approved spot Bitcoin ETFs including ibit last January, the agency allowed the funds to be launched with cash redemptions instead of Bitcoin.
“It should have been approved in the first place, but Gensler/Crenshaw didn’t want to allow it for a whole bunch of reasons they gave,” Bloomberg Intelligence ETF analyst James Seyffart wrote of X. “Essentially [they] Didn’t want brokers that touched actual Bitcoin. “
BlackRock’s IBIT is the largest spot BTC ETF on the market, attracting nearly $40 billion in inflows in its first year, making it the most successful ETF debut ever.
