Nasdaq has presented a groundbreaking proposal to the SEC to implement in-kind redemptions for Bitcoin ETFs, specifically targeting BlackRock's iShares Bitcoin Trust. This new framework would allow authorized participants to exchange ETF shares directly for bitcoin, eliminating the need for a cash redemption process. While only applicable to institutional participants, the change is anticipated to enhance operational efficiency and could indirectly benefit retail investors by creating a more streamlined ETF market. The proposal is a response to the rapid growth and maturation of the Bitcoin ETF landscape, which necessitates improved infrastructure.
Under the proposed system, authorized participants could exchange ETF shares directly for bitcoin, simplifying the redemption process and reducing operational costs.
The rapid growth of the Bitcoin ETF market has created new opportunities to improve its infrastructure, prompting Nasdaq to propose in-kind redemptions.
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