BlackRock Spot Bitcoin ETF: Nasdaq Proposes In-Kind Redemption Mechanism.

Nasdaq Pushes for In-Kind Redemptions in BlackRock Bitcoin ETF Filing

Nasdaq has filed a request with the U.S. Securities and Exchange Commission (SEC) to enable in-kind creation and redemption for the BlackRock iShares Bitcoin Trust (IBIT), according to a regulatory filing on Friday.

This method would allow authorized participants (APs)—institutional entities responsible for managing ETF supply and demand—to exchange shares of the ETF directly for bitcoin (BTC). The approach is considered more efficient as it eliminates the need for cash transactions and allows APs to react swiftly to market changes. Retail investors, however, would not have access to this mechanism.

The SEC initially approved spot bitcoin ETFs, including IBIT, in January 2024 but only allowed cash-based redemptions at the time. Analysts have criticized this decision, citing unnecessary complexity.

“It was an unnecessary restriction rooted in hesitation about brokers interacting with bitcoin,” Bloomberg Intelligence ETF expert James Seyffart noted on X.

Since its launch, BlackRock’s IBIT has captured nearly $40 billion in inflows, marking it as the most successful ETF debut to date. Nasdaq’s latest filing aims to refine the operational framework of the fund and improve efficiency for institutional participants.