BlackRock/iShares Files to Allow In-Kind Creation and Redemption on Their Bitcoin ETF $IBIT

American investment management company BlackRock is pushing for a new redemption model for its ETF product, the iShares Bitcoin Trust (IBIT).

American investment management company BlackRock is pushing for a new redemption model for its exchange-traded fund product, the iShares Bitcoin Trust (IBIT).

Nasdaq Stock Market LLC, the trading venue for IBIT, filed for the in-kind redemption model with the United States Securities and Exchange Commission on Friday.

The proposed rule change from Nasdaq anchors on the provisions of Section 19(b)(1) of the Securities Exchange Act of 1934. As demanded, it seeks to allow specifically qualified or authorized participants to transfer the trust’s Bitcoin holdings.

“The rule change would permit authorized participants to choose to have their proceeds from the redemption of creation units of the Trust (as applicable) be paid in-kind (i.e., in a quantity of Bitcoins) or in-cash (i.e., in same-day funds),” the filing reads.

If approved, this rule change will allow authorized participants to redeem their proceeds in BTC instead of cash. The in-kind model is ideal for most exchange-traded fund products. However, in the runup to the approval last year, the issuers compromised as the Gary Gensler-led SEC preferred the cash creates model.