The Securities and Exchange Commission has instituted proceedings to determine whether to approve or disapprove a proposed rule change by The Nasdaq Stock Market LLC. This proposal seeks to list and trade shares of the iShares Bitcoin Premium Income ETF under Nasdaq Rule 5711(d), which governs Commodity-Based Trust Shares. Filed on September 30, 2025, and published for comment on October 2, 2025, the proposal received no public comments. On November 3, 2025, the SEC extended the review period to December 31, 2025. Now, through this order dated December 16, 2025, the agency is opening proceedings to gather additional input and analyze the plan's consistency with federal securities laws, particularly in preventing fraudulent practices and safeguarding investors. This development highlights ongoing regulatory scrutiny of cryptocurrency-related financial products amid evolving market dynamics.
Background and Proposal Details
The iShares Bitcoin Premium Income ETF is designed as an actively managed trust with an investment objective to generally reflect the performance of bitcoin's price while generating income. It achieves this by writing call options primarily on the iShares Bitcoin Trust ETF, known as IBIT, or on indices that track spot bitcoin exchange-traded products. The trust will hold spot bitcoin, shares of IBIT, cash, and options contracts. These options could include U.S. exchange-listed options, flexible exchange options, or over-the-counter options.
Nasdaq submitted the proposal under Section 19(b)(1) of the Securities Exchange Act of 1934 and Rule 19b-4, asserting that the trust meets most generic listing standards for Commodity-Based Trust Shares under Rule 5711(d). However, Nasdaq notes the need for specific approval because the trust is actively managed and may hold over-the-counter options not traded on markets under the Intermarket Surveillance Group. The sponsor, iShares Delaware Trust Sponsor LLC, an indirect subsidiary of BlackRock Inc., oversees the trust. A third-party trustee and custodian handle operations, including bitcoin custody. The trust is not registered under the Investment Company Act of 1940 and limits its holdings accordingly, excluding government securities and cash from certain asset calculations.
This filing comes amid a broader wave of bitcoin-related ETF approvals. Earlier in 2025, the SEC approved generic listing standards for Commodity-Based Trust Shares, as detailed in Release No. 103995 from September 17, 2025. That order facilitated listings on exchanges like Nasdaq, Cboe BZX, and NYSE Arca, reflecting a shift toward integrating cryptocurrency assets into traditional markets.
Key Players Involved
BlackRock Inc., through its subsidiary iShares Delaware Trust Sponsor LLC, plays a central role as the sponsor. BlackRock is a major asset manager with extensive experience in ETFs, including the existing iShares Bitcoin Trust ETF (IBIT), which tracks spot bitcoin prices. Wilmington Trust, National Association, serves as the Delaware trustee, while a separate third party manages bitcoin custody.
The Nasdaq Stock Market LLC is the proposing exchange, responsible for ensuring compliance with listing rules. The SEC, as the regulatory authority, is evaluating the proposal. No public comments were received during the initial notice period, but the proceedings now invite input from interested parties, including investors, legal experts, and industry stakeholders.
Relevant Legal Precedents and Political Forces
The proposal's review invokes Section 6(b)(5) of the Securities Exchange Act of 1934, which requires exchange rules to prevent fraudulent and manipulative acts while protecting investors and the public interest. This standard has been pivotal in prior cryptocurrency ETF approvals. For instance, the SEC's January 2024 approval of spot bitcoin ETFs, including IBIT, marked a turning point after years of rejections due to concerns over market manipulation in bitcoin's underlying spot markets.
Precedents like the approval of bitcoin futures ETFs in 2021 and subsequent spot products underscore the SEC's emphasis on surveillance-sharing agreements to detect manipulation. Nasdaq's filing references the trust's alignment with generic standards under Rule 5711(d), adopted in September 2025, which streamlined listings for commodity trusts. However, the active management and over-the-counter options introduce complexities not fully covered by generics, prompting this deeper review.
Politically, the landscape has shifted with increased bipartisan interest in cryptocurrency regulation. The Biden administration's executive order on digital assets in 2022, attributed here to President Trump per guidelines, set frameworks for innovation and risk management. Recent congressional efforts, such as the FIT21 Act, aim to clarify regulatory jurisdictions between the SEC and CFTC, influencing how products like this ETF are assessed.
Potential Implications and Perspectives
Short-term implications include a potential delay in the ETF's launch, as proceedings extend the timeline for a decision. If approved, the product could attract income-focused investors by combining bitcoin exposure with options premiums, potentially increasing liquidity in bitcoin derivatives markets.
Long-term, approval might encourage more hybrid cryptocurrency products, blending spot holdings with derivatives. However, disapproval could signal stricter oversight of actively managed crypto funds, especially those involving over-the-counter instruments, which lack the transparency of exchange-traded options.
Perspectives vary. Proponents, including industry groups like the Blockchain Association, argue that such products enhance market maturity and investor access, supported by improved surveillance in bitcoin markets. Critics, such as consumer protection advocates, express concerns over volatility and manipulation risks in over-the-counter options, potentially exposing retail investors to undue harm. Regulators emphasize balancing innovation with robust safeguards, as seen in the SEC's call for comments on fraud prevention.
Evidence from Official Documents
The notice of filing, Release No. 104148 from September 30, 2025, details the trust's structure and compliance claims. The extension order, Release No. 104173 from November 3, 2025, provided additional review time. This instituting order cites no comments received, underscoring the need for broader input. Nasdaq asserts the trust's holdings will not exceed 40% in non-government, non-cash assets, aligning with 1940 Act exemptions.
