Nasdaq applies to modify BlackRock's Bitcoin ETF to allow for physical redemptions

2025-01-25 08:11:59

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ChainCatcher news, on Friday, Nasdaq submitted a revised rule filing on behalf of BlackRock, allowing the BlackRock iShares Bitcoin Trust to conduct in-kind redemption. Typically, when investors want to sell an ETF, they receive redemption proceeds in cash. In-kind redemption means that investors can choose to redeem using the underlying assets (i.e., Bitcoin) that the ETF is invested in.

In the year leading up to the Securities and Exchange Commission (SEC) approving a spot Bitcoin ETF, various companies have been discussing the specific technical details of how this product would conduct redemptions. The SEC tends to favor cash redemptions, which means that when investors want to redeem their Bitcoin ETF shares, the fund management company (such as BlackRock) must first sell the Bitcoin it holds and then return the cash obtained from the sale of Bitcoin to the investors.

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