Nasdaq has proposed a significant change to BlackRock's Bitcoin ETF, allowing in-kind BTC redemptions instead of the current cash redemptions. This change would enable large institutional investors, known as authorized participants, to redeem shares for actual Bitcoin rather than selling it through a market maker for cash. This proposal follows recent changes in SEC regulations, specifically the repeal of Staff Accounting Bulletin No. 121, which previously complicated the accounting of crypto assets. The new rule aims to streamline redemptions, potentially reducing the overall selling pressure on Bitcoin during redemption events. James Seyffart, a Bloomberg ETF analyst, noted that this change would enhance the ETF's trading efficiency, benefiting institutional participants. The move reflects a broader shift in SEC policy favoring clearer regulations for cryptocurrency, as indicated by the newly formed crypto task force under Commissioner Hester Peirce. Overall, the proposed rule change marks a progressive step in the integration of Bitcoin ETFs within mainstream finance.

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