BlackRock has sharply reduced the minimum amount of Bitcoin investors need to swap directly for shares in its Nasdaq-listed spot Bitcoin ETF, IBIT, according to a Bloomberg report. The minimum has fallen to $1 million from $25 million, making the so-called in-kind swap more accessible to large Bitcoin holders.
The change comes as crypto investors increasingly look for regulated custody options amid rising concerns over hacks, kidnappings and other security risks. Bitwise has also lowered its minimum for similar transactions to $3 million from $100 million, Bloomberg reported.
The process, known as “in-kind creation”, allows investors to hand their Bitcoin directly to an ETF and receive ETF shares in return. This means they do not have to first sell their Bitcoin for cash and then purchase ETF shares.
That distinction can be important for investors because selling Bitcoin may trigger capital gains taxes. An in-kind transaction can allow them to move from holding Bitcoin directly to holding ETF shares without making that intermediate sale.
The change also comes as such transactions are becoming more common. BlackRock’s IBIT has processed more than $5 billion in in-kind swaps, up from about $3 billion in October, according to Robbie Mitchnick, BlackRock’s head of digital assets, as cited by Bloomberg.
Security concerns appear to be playing a growing role in the decision. Bitcoin holders who manage their own assets face risks ranging from hacking and theft to increasingly sophisticated crypto-related kidnappings. “People see things happen in the outside world” that encourage them to move some or all of their holdings into ETFs, Mitchnick told Bloomberg.
The trend is not limited to Bitcoin. ETF issuers including Grayscale and VanEck have also introduced in-kind mechanisms for Ether products, showing that the structure is becoming more relevant across the digital-asset market.
US spot crypto ETFs have attracted billions of dollars since their launch in 2024. Lower minimums for direct swaps could make these products even more attractive to wealthy crypto investors who want the convenience and regulated custody of an ETF without necessarily giving up their existing Bitcoin holdings.
For BlackRock, the move could further strengthen IBIT’s position as a bridge between traditional investment infrastructure and investors who already hold significant amounts of cryptocurrency.
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