iShares Bitcoin Trust Gets Nasdaq-Recommended Optimization

Key Points:

• Nasdaq filed a rule change with the SEC to allow in-kind transfers for the iShares Bitcoin Trust ETF.
• The proposed in-kind mechanism aims to streamline operations, reduce tax burdens, and address growing investor demand for flexibility in ETF processes.

Nasdaq has submitted a proposed rule change to the U.S. Securities and Exchange Commission (SEC) to update regulations for the iShares Bitcoin Trust, potentially introducing in-kind transfers for the exchange-traded fund (ETF).

Read more: BlackRock Bitcoin ETF Is The Greatest Launch in ETF History

Nasdaq Seeks SEC Approval for In-Kind iShares Bitcoin Trust Transfers

Currently, Bitcoin ETFs like the iShares Bitcoin Trust operate on a cash redemption model. Under this structure, fund issuers sell Bitcoin holdings and return the cash proceeds to investors, a process that can introduce tax inefficiencies and operational complexities.

The proposed in-kind transfer mechanism would streamline redemptions, letting authorized participants—large institutional investors—redeem ETF shares for the underlying Bitcoin without relying on market makers to facilitate cash exchanges.

Regulatory Landscape Shifts Under New Administration

If approved, the change could reduce tax burdens and provide a more seamless experience for institutional investors.

This development comes at a time of significant regulatory evolution under President Donald Trump’s administration. Following the departure of SEC Chair Gary Gensler, the agency has formed a crypto task force focused on creating clear regulations for digital assets. On Thursday, the SEC also rescinded SAB 121, a controversial rule that discouraged banks from holding custody of cryptocurrencies.