NASDAQ has filed a proposal with the US Securities and Exchange Commission (SEC) to enable the regular creation and redemption of the Ishares Bitcoin ETF (IBIT).
This request, filed on January 24, seeks to amend the ETF’s operational framework to allow direct Bitcoin transactions alongside the existing cash model.
ETF Bitcoin etf Blackrock flow chain is in line with the Nasdaq in-kind payment
The proposed precise process would simplify the ETF creation and redemption system, reducing the number of intermediaries involved. However, this feature will be exclusive to institutional participants, leaving retail investors out of the in-kind process.
If approved, the change would allow authorized participants (APS) to settle transactions in Bitcoin instead of converting the asset to cash. This method offers potential benefits, including tax efficiency, better price alignment with Bitcoin’s market cap, and a more streamlined process.
“BTC ETFs are about to be more efficient similar to European ETPs. Authorized participants can now create and redeem Bitcoin directly from using just cash,” Tom Wan, analyst I mentioned.
James Seyphart, an ETF analyst at Bloomberg, highlighted the operational efficiency of this model. He noted that regular transfers involve fewer steps and parties compared to the cash-based process, which should make the ETFs process more smoothly. This efficiency could enhance the appeal of Bitcoin ETFs to institutional investors.
“What that means is that ETFs should trade more efficiently than they already do in theory because things can be simplified,” Seyphart said. He said.
An order from Nasdaq reflects growing demand for more flexible ETF structures. When SPOT Bitcoin ETFs first launched in January 2024, the SEC required issuers to use a cash-back-only model because the regulator “didn’t want to touch actual bitcoin,” he said. Seyfart.
However, as the market has matured, calls for in-kind transfers have gained momentum, with proponents arguing that they are better aligned with the decentralized nature of digital assets.
The filing coincides with a period of significant growth for ibit. According to SoSovalue data, the ETF recently attracted more than $2 billion in fresh inflows over a six-day streak.
Since its debut, IBIT has accumulated $39.7 billion in inflows, cementing its position as the top-tier Bitcoin ETF in the United States.
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