🌎 Nasdaq Aims to Simplify BlackRock Bitcoin ETF Transfers

Nasdaq Files with SEC to Simplify BlackRock’s Spot Bitcoin ETF Transfers

Nasdaq’s SEC Filing Aims to Streamline Bitcoin ETF Transfers

Nasdaq has submitted a filing to the U.S. Securities and Exchange Commission (SEC) on behalf of BlackRock, proposing to amend certain conditions for the iShares Bitcoin Trust. The amendment would allow for in-kind transfers of the Trust’s Bitcoin, simplifying the process for authorized participants.

According to the filing, the proposed in-kind transfer process will be an alternative to the Trust’s current cash creation and redemption process. If approved, authorized participants – typically large corporations – will be able to exchange Bitcoin ETF shares for underlying assets, including Bitcoin, instead of cash.

Impact on Trading Efficiency and Liquidity

Bloomberg ETF analyst James Seyffart explained that this change will make trading ETFs more efficient, stating that it is “way more streamlined with less steps and less parties involved.” Seyffart also criticized the SEC’s previous stance on enforcing on-cash redemptions, attributing it to regulatory preferences.

In my opinion, the ETFs should have been allowed to do this from the get-go, but the Dem [Democratic] SEC commissioners were against it.

While this change may not have a significant impact on individual investors, it will benefit IBIT’s investors by increasing liquidity and potentially improving tax efficiency. According to Chris J. Terry, chief architect at Bitseeker Consulting, in-kind redemptions can minimize capital gains distributions, ultimately benefiting shareholders.

BlackRock’s IBIT Performance and Holdings

BlackRock’s IBIT has experienced significant growth, with net inflows of $661.9 million on the first business day of Trump’s presidency. However, inflows have slowed down in recent weeks. As of January 22, BlackRock’s IBIT added 6,470 BTC to its holdings, bringing the total to 563,134 BTC, valued at $55.6 billion based on current market prices.

Key benefits of the proposed amendment include: