Key Takeaways
- Nasdaq filed to allow in-kind Bitcoin transactions for IBIT.
- The model aims to improve efficiency and tax benefits for institutions.
- IBIT recorded $2 billion inflows in six days, cementing its dominance.
Nasdaq has filed a proposal with the U.S. Securities and Exchange Commission (SEC) to introduce in-kind creation and redemption for BlackRock’s iShares Bitcoin ETF (IBIT).
The filing, submitted on Jan. 24, aims to allow institutional participants to transact directly in Bitcoin instead of cash.
Operational benefits
This operational shift is designed to enhance efficiency, reduce intermediaries, and offer tax benefits.
Currently, Bitcoin ETFs in the U.S. operate on a cash-only redemption model.
Crypto analyst Tom Wan noted:
Authorized Participants can now create and redeem directly with Bitcoin rather than using cash.
This comes in contrast to similar European exchange-traded products.
Expert analysis
ETF analyst James Seyffart highlighted the benefits of the proposed system, stating:
In-kind transfers involve fewer steps and parties, which should make ETFs trade more smoothly.
These changes could make Bitcoin ETFs more appealing to institutional investors, aligning with the decentralized nature of digital assets.
IBIT growth & performance
The timing of the proposal coincides with a period of growth for IBIT.
Over the past six days, the ETF has attracted $2 billion in fresh inflows, bringing its total inflows to $39.7 billion since its launch in January 2024.
This cements IBIT as the leading spot Bitcoin ETF in the U.S.
Market implications
Nasdaq’s proposal reflects increasing demand for flexible ETF structures as the Bitcoin market matures.
If approved, this could mark a significant shift in the operational framework of Bitcoin ETFs.
