Nasdaq filed a proposed rule change with the U.S. Securities and Exchange Commission on January 24, 2025 to permit in-kind transfers of bitcoin for the iShares Bitcoin Trust, the BlackRock-sponsored exchange-traded product trading under the ticker IBIT.
The filing targeted a defining constraint imposed when U.S. spot bitcoin products were approved in January 2024: their creation and redemption processes operated through cash rather than direct bitcoin transfers between a fund and its authorized participants. Nasdaq’s proposal sought to make in-kind transactions an alternative for IBIT, moving its operating model closer to the structure commonly associated with commodity exchange-traded products.
Nothing was approved or implemented on January 24. The filing initiated an SEC review of proposed exchange-rule changes; it did not authorize retail shareholders to exchange IBIT shares for bitcoin, alter bitcoin’s legal classification or guarantee that the requested mechanism would become available.
What an in-kind process would change
Authorized participants are financial institutions permitted to create or redeem large blocks of an exchange-traded product’s shares. Under IBIT’s cash process, an authorized participant supplies or receives dollars while the trust arranges the corresponding bitcoin purchase or sale through its trading infrastructure.
An in-kind process would instead allow bitcoin to move between the trust and an authorized participant, its agent or an eligible client as part of a creation or redemption. The mechanism concerns the fund’s wholesale operating layer. It would not give an ordinary brokerage customer the right to surrender individual IBIT shares and receive bitcoin in a personal wallet.
That distinction mattered because contemporary reporting sometimes compressed the proposal into the simpler phrase “redeem shares for bitcoin.” The verified scope was narrower: Nasdaq wanted IBIT’s authorized-participant channel to support direct transfers of the underlying asset while retaining the existing cash route.
The institutional argument for in-kind processing was operational efficiency. Cash creations and redemptions require the trust to execute bitcoin trades, introducing an additional transaction and potential differences between the valuation used for an order and the price obtained in the market. Direct asset transfers could remove that trading step for qualifying orders. That was the proposal’s rationale, not evidence that costs, tracking or liquidity had already improved.
A filing shaped by the 2024 approval
The SEC approved exchange rules for 11 spot bitcoin products, including IBIT, on January 10, 2024. Commissioner Mark Uyeda’s contemporaneous statement noted that applicants had replaced proposed in-kind processes with cash-only creation and redemption features before approval. He questioned why spot bitcoin products differed from other commodity-based exchange-traded products on that point.
Nasdaq’s January 24 filing therefore addressed unfinished market-structure business from the original approval process. It did not seek permission for IBIT to begin holding bitcoin—the trust already did that. It sought to change how bitcoin or cash could enter and leave the trust when authorized participants created or redeemed share baskets.
The request also arrived during a rapid change in the federal posture toward digital assets, including new SEC leadership and the establishment of an SEC crypto task force earlier in the same week. That political and regulatory setting made reconsideration more plausible, but it supplied no assurance about the filing’s outcome.
What was knowable on January 24
Contemporaneous reporting identified the filing and its in-kind objective on January 24. The SEC’s formal notice, issued on February 6, later confirmed that date and purpose. It also disclosed that Nasdaq filed an amendment on February 4 that replaced the original submission in its entirety.
That procedural history limits the event-day record. Detailed mechanics visible in the February amendment should not be treated as though every provision was fixed on January 24. The defensible conclusion for the archive is that Nasdaq opened a formal regulatory effort to add in-kind bitcoin transfers to IBIT. No same-session price, volume, flow or liquidity effect can be attributed to the filing from the cited evidence.
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