Breaking: BlackRock Files For In-Kind Redemption For iShares Bitcoin Trust

American investment management company BlackRock is pushing for a new redemption model for its ETF product, the iShares Bitcoin Trust (IBIT). Notably, its trading venue, the Nasdaq Stock Market LLC, filed for the in-kind redemption model with the United States Securities and Exchange Commission (SEC).

The BlackRock iShares Trust In-Kind Redemption

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.

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.

Detailing what this means for the market, Bloomberg Senior ETF Analyst James Seyffart noted that it won’t mean much for retail traders. He said with in-kind redemption, the entire Bitcoin ETF market will trade more efficiently.

Wow. Way too many questions and this stuff goes pretty deep in the weeds. So i’ll keep it high level and answer “What does this mean?”

Not all that much for individual retail investors. Mostly what it means is that ETFs should trade even more efficiently than they already do… pic.twitter.com/LWYsKmo5sH

— James Seyffart (@JSeyff) January 24, 2025

This filing comes after BlackRock recently launched the BTC ETF variant on CBOE Canada. 

BlackRock Bitcoin ETF Outperforming

The asset manager is the biggest Bitcoin ETF issuer in the world, with the IBIT holdings topping $60 billion. IBIT crossed the $50 billion milestone for the first time in December 2024, an impressive feat attained after just one year.

BlackRock has continued to stun the market; per current data, it has recorded three consecutive days of inflows. Farside Investors data pegs this at $661.9 million on January 21, $344.3 million, and $154.6 million on January 22 and 23, respectively.

The positive trading milestone of IBIT also extended into January 24. Per market data, it recorded over $2 billion in trading volumes in the first few hours.

Setting the Pace for Competitors

Market experts noted that with BlackRock pushing for in-kind redemption, other crypto ETF issuers may follow soon.

BlackRock is, however, to file similar in-kind redemption for its Ethereum ETF product. While it is setting a pace in key ETF offerings, it has subtly distanced itself from the alternative crypto ETF filings as it is becoming a trend.

Coingape reported multiple  ETF filings earlier as asset managers woke up to the pro-crypto US SEC. One of the recent high-profile filings is the Grayscale Bitcoin Adapters ETF. This offering was designed to track the performance of publicly traded firms with a Bitcoin exposure.