Overview
- BlackRock’s iShares Bitcoin Trust (IBIT) has processed several billion dollars of in‑kind Bitcoin transfers, with BlackRock saying the fund has handled more than $5 billion in conversions.
- In‑kind creation is a process where holders deliver Bitcoin to an ETF’s custodian and receive newly created ETF shares instead of selling for cash, which can avoid a near‑term capital gains event in some cases.
- BlackRock lowered its minimum in‑kind creation size to $1 million, making the swap practical for more large holders and helping turn a bespoke service into a routine channel into regulated markets.
- Holders cite security, tax treatment, estate planning, and compliance as reasons for the move, and custodians such as Coinbase Custody now hold larger, concentrated pools of Bitcoin previously kept in private wallets.
- The shift has reduced self‑custodied supply on chain and altered liquidity dynamics, but not all big holders follow the same playbook and institutional filings can overstate direct ETF ownership because of reporting rules for options.