Nasdaq Wants to Swap Real Bitcoin for ETF Shares, SEC Reviewing
Published Date: 7/14/2025
Notice
Summary
Nasdaq wants to update the rules for the iShares Bitcoin Trust so investors can swap bitcoin directly when creating or cashing out shares, instead of using cash only. This change makes trading smoother and could save money on fees for folks involved. The SEC is reviewing this update now, with decisions and comments happening through mid-2025.
Analyzed Economic Effects
4 provisions identified: 2 benefits, 0 costs, 2 mixed.
In-kind creations and redemptions allowed
The iShares Bitcoin Trust will allow in-kind creations and redemptions so Authorized Participants (or their designated agents or clients) can deliver or receive bitcoin instead of cash when creating or redeeming Baskets. A Basket is 40,000 Shares (or integral multiples), and in-kind orders must be submitted by the In‑Kind Order Cutoff Time, initially 3:59 p.m. ET on the trade date.
Price-difference responsibility for failed settlements
If the Trust must buy or sell bitcoin to complete a cash or in‑kind creation or redemption because delivery or trading did not settle by the settlement date, the Authorized Participant is responsible for the dollar cost difference between the bitcoin price used in calculating NAV on trade date and the price at which the Trust acquires or sells the bitcoin. If the Trust realizes a more favorable price, the Authorized Participant keeps that dollar impact.
New order cutoff and settlement timing
The Trust sets different order cutoff times: the Cash Order Cutoff Time is initially 6:00 p.m. ET on the business day before the trade date, while the In‑Kind Order Cutoff Time is initially 3:59 p.m. ET on the trade date. If bitcoin delivery or trading is not completed by settlement date, Authorized Participants may cancel, delay settlement, or accept that the Trust will execute the bitcoin transaction and the participant will bear certain costs.
Custody, cold storage, and use of trading/financing accounts
The Trust's bitcoin will be held in a Custody Account with the Bitcoin Custodian and the Custodian will keep the private keys in "cold storage." The Trust may temporarily maintain bitcoin and cash in a Trading Account at the Prime Execution Agent for creation/redemption activity or to pay expenses, and may borrow Trade Credits (cash or bitcoin) from an affiliate (Coinbase Credit, Inc.) to facilitate purchases or sales.
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