Nasdaq seeks to allow ‘in-kind’ redemptions for BlackRock’s Bitcoin ETF

Nasdaq is filing with the SEC to authorize in-kind transfers from BlackRock’s Bitcoin to Cash ETF, simplifying the process for authorized participants.

In a deposit submitted to the United States Securities and Exchange Commission, Nasdaq proposed on behalf of black rock to modify certain conditions formulated in the initial proposal for iShares Bitcoin (BTC) Trust that “would allow in-kind transfers of the Trust’s Bitcoin.”

“The proposed in-kind transfer process will be an alternative to the Trust’s current cash creation and redemption process,” Nasdaq wrote in the document.

If the amendment is approved, IBIT investors belonging to the category of authorized participants will be able to trade Bitcoin ETFs shares for the underlying assets instead of cash. These underlying assets may also include Bitcoin, among others. Authorized participants are generally large companies and not individual shareholders. Redemption in kind helps maintain the liquidity of the ETF by simplifying the process.

Bloomberg ETF analyst James Seyffart explained in a recent job that the ETF trading process will become more efficient because it is “much more streamlined with fewer steps and fewer parties involved.” He also goes after the SEC when it operated under Gary Gensler for forcing cash buyouts because of regulatory preferences.

“In my opinion, ETFs should have been allowed to do this from the start, but the Democrats [Democratic] The SEC commissioners were against it,” Seyffart said.

While this change may not mean much to individual investors, it greatly benefits IBIT investors. Besides liquidity, Bitseeker Consulting chief architect Chris J. Terry said in-kind redemptions can play a major role in tax efficiency because they can minimize capital gains distributions, which would benefit in turn to the shareholders.

As before reported According to crypto.news, BlackRock’s IBIT topped the 12 Bitcoin ETFs with net inflows of $661.9 million on the first business day of Trump’s presidency. However, it has seen a slowdown in inflows over the past week.

On January 22, BlackRock IBIT added 6,470 BTC to his holdings, bringing the total to 563,134 BTC. BlackRock’s IBIT Bitcoin holdings are currently valued at $55.6 billion, based on current market prices.