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BlackRock has cut the minimum Bitcoin required for a direct swap into its IBIT exchange-traded fund from $25 million to $1 million. The lower threshold gives more large holders access as concerns over crypto theft, kidnappings, hacks, and custody failures grow.
IBIT has already processed more than $5 billion through these swaps, up from $3 billion in October, according to BlackRock digital-assets chief Robbie Mitchnick.
The process uses in-kind creation, which allows an investor to transfer Bitcoin to the fund and receive IBIT shares in return. As a result, the holder does not first need to sell Bitcoin and then purchase ETF shares.
That structure can remove the separate Bitcoin sale that could create a capital gains tax event. Meanwhile, Bitwise has also reduced its direct-swap threshold to $3 million from $100 million.
BlackRock lowered the IBIT minimum in July. Mitchnick said the fund should keep growing as the company expands access to investors who want Bitcoin exposure through an ETF.
Security concerns have become part of the shift from self-custody to fund shares. Kidnappings, hacks, hardware-wallet attacks, and custody failures have influenced some holders to reconsider how they store Bitcoin.
BlackRock is also seeking to benefit from concerns surrounding attacks on Coldcard hardware wallets. Some owners had believed their devices provided secure storage before attackers compromised certain versions.
Could rising security risks drive more Bitcoin whales to exchange direct custody for regulated ETF shares? The lower IBIT threshold now gives more large holders a practical route to make that change.
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The access change comes as Bitcoin has climbed about 20% over the last week. The cryptocurrency also moved above $80,000 for the first time since May. IBIT now holds slightly more than 765,000 Bitcoin worth about $60 billion on behalf of investors. Since launch, the fund has also reached several ETF growth milestones at a rapid pace.
The latest move broadens access for Bitcoin whales who prefer fund shares over direct custody. At the same time, the in-kind route lets those holders move exposure without first selling their Bitcoin.
BlackRock’s lower IBIT threshold gives more large Bitcoin holders access to in-kind conversions as security concerns around self-custody grow. With more than $5 billion already processed through these swaps, the change broadens a route for whales seeking ETF exposure without first selling their Bitcoin.
