BlackRock's iShares Bitcoin Trust ETF may undergo a significant update that allows institutional investors to redeem shares for the underlying Bitcoin instead of cash. This change comes with a Nasdaq proposal filed on January 25, 2025, and is poised to enhance the efficiency of ETF trading. Current rules mandate that investors sell Bitcoin through market makers and receive cash during redemptions, which can lead to increased selling pressure on Bitcoin in the market. The proposed rule change would streamline the redemption process by limiting the number of required steps and parties involved, potentially leading to less market disruption when redemptions occur. This move aligns with recent regulatory shifts under U.S. President Donald Trump's administration, aimed at simplifying cryptocurrency regulations, and follows the rescinding of Staff Accounting Bulletin No. 121, which complicated the accounting for crypto assets held on behalf of users. The proposed changes may enhance the attractiveness of Bitcoin ETFs, promoting more in-kind transactions instead of cash redemptions.

Source đź”—