BlackRock has processed more than $5 billion in Bitcoin-for-share swaps from private wallets into its IBIT ETF, after cutting the minimum transaction size to $1 million in July. The move lets holders keep Bitcoin exposure while shifting custody into a regulated structure, and security concerns around self-custody are adding to the appeal.
BlackRock's iShares Bitcoin Trust has facilitated more than $5 billion in Bitcoin-for-ETF-share swaps from private wallets, according to a Bloomberg report cited by CryptoPotato. The fund opened this in-kind creation process to private wallets at a $25 million minimum, then cut that threshold to $1 million in July.
IBIT's swap volume climbs since October
IBIT's total volume for these conversions has climbed past $5 billion, up from more than $3 billion when Bloomberg first reported on the trend last October. Robbie Mitchnick, BlackRock's head of digital assets, said the process can take more than a week to complete, and inquiries are now coming in from clients both inside and outside the US.
Mitchnick linked the growth to security scares, saying incidents like kidnappings, ransom situations, and custody failures "motivate them to make this switch for all or some of their holdings." As a result, some whales are trading self-custody for the protections of a regulated fund structure.
Tax treatment adds to the incentive
Swapping Bitcoin for ETF shares also lets holders avoid triggering an immediate capital gains bill in many cases, since the BTC is exchanged rather than sold outright. This tax treatment gives large holders another reason to move, on top of the custody-security angle.
BlackRock is not alone in loosening the entry point. Bitwise has cut its own in-kind minimum from $100 million at launch to $50 million and now $3 million, a pace its chief investment officer, Matt Hougan, described as moving more like a conveyor belt.
Source: CryptoPotato
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