Nasdaq has applied on behalf of BlackRock for a rule change that would allow the creation and in-kind redemption of its spot Bitcoin exchange-traded fund (ETF).
The move was widely expected, according to Bloomberg ETF analyst James Seyffart, who noted in a Jan. 24 blog post that BlackRock should have been able to do this since the BlackRock iShares Bitcoin Trust (IBIT) was launched along with 10 other US-based Bitcoin ETFs in January 2024.
The SEC filing, dated Jan. 24, indicated that Nasdaq suggested allowing in-kind transfers of Bitcoin from the Trust.
This means that institutions called Authorized Participants, which help create and redeem shares for the fund, would have the option to use cash or Bitcoin to create shares or receive cash or Bitcoin when redeeming shares.
This adjustment will make the ETF more efficient by avoiding bid/ask spreads and fees resulting from selling the basket of assets to obtain cash for shares.