Nasdaq Submits Application: BlackRock BTCETF IBIT for Physical Creation and Redemption

Nasdaq (Nasdaq) exchange submitted a revised rule file on Friday (1/24), hoping to allow BlackRock's BTCSpot ETF (IBIT) for physical redemption and creation of BTC.

According to a tweet by James Seyffart, an ETF analyst at Bloomberg, Nasdaq exchange has filed a 19b-4 amendment application for BlackRock's BTCSpot ETF (IBIT) in the hope of enabling the redemption and creation of its BTCSpot ETF in kind.

Before the approval of SpotBTC ETF over a year ago, the U.S. Securities and Exchange Commission (SEC) and the issuer had been discussing whether the redemption should be in kind or in cash. Ultimately, the issuer decided to list the SpotBTC ETF in cash first, as the SEC was evidently concerned about registered broker-dealers coming into contact with BTC in the workflow.

(ETF Illustrated | What are the differences between the ETF cash mode preferred by the SEC and the physical BTC ETF of BlackRock?)

However, in theory, the trading efficiency of ETFs created through physical redemption should be higher. For example, in the case of a gold ETF, most issuers choose the physical mode, and the process is relatively simple.

Analyst Seyffart also warns that individuals cannot create and redeem physical (BTC), only authorized participants (AP) can perform this operation.