BlackRock has cut the minimum for converting Bitcoin directly into shares of its iShares Bitcoin Trust (IBIT) to $1 million, down from $25 million, opening its in-kind conversion program to a far wider pool of holders. The program has processed more than $5 billion in swaps, up from roughly $3 billion in October 2025, as wealthy holders trade self-custody risk for a regulated Wall Street wrapper.
BlackRock slashed the minimum transaction size for its Bitcoin-to-IBIT conversion program to $1 million in July 2026, down from $25 million, Bloomberg reported on August 25, 2026. The change opens a swap process once reserved for the largest holders to family offices and wealthy individuals seeking exposure through BlackRock's spot Bitcoin ETF rather than a private wallet.
How the swap works
The program runs through authorized participants, the intermediaries that create and redeem ETF shares: a holder delivers Bitcoin to the participant, who passes it to the trust and issues IBIT shares back. Because no sale hits the open market, no immediate capital-gains event is triggered, unlike a direct sale of Bitcoin. In exchange, custody of the coins shifts to Coinbase, IBIT's fund custodian, and the resulting shares sit in a standard brokerage account where they can be margined or used as collateral.
Whales cite custody risk
Robbie Mitchnick, BlackRock's head of digital assets, said "kidnappings, ransom demands, and custody failures" motivate some holders to move Bitcoin into the regulated fund structure. Mitchnick also said conversions can take more than a week to complete.
Rivals follow, BlackRock keeps its edge
Rival issuer Bitwise has cut its own minimum even further, from $100 million to $3 million. Still, BlackRock's scale gives it a head start: the firm manages over $10 trillion in total assets across its platform. IBIT alone holds roughly 3.645% of Bitcoin's total supply with net assets of $60.65 billion.
Tax treatment adds another incentive. Converting into IBIT counts as a like-kind exchange rather than a sale, so the tax bill on the original cost basis is deferred, not avoided, until the shares are eventually sold.
Sources: Insider Monkey via Yahoo Finance, Crypto Briefing
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