BlackRock Says Bitcoin Whales Are Converting Record Amounts Into IBIT

Overview

• BlackRock told reporters that demand for in‑kind Bitcoin-to-IBIT conversions has hit record levels and the firm has observed about $3.6 billion of such swaps, a trend the company described as strongest in its history.
• The conversions let an owner hand existing bitcoin to the fund through an authorized intermediary and receive newly created IBIT shares without a prior sale for cash, a process enabled by the SEC’s July 29, 2025 approval of in‑kind ETF creations and redemptions.
• BlackRock uses intermediaries such as Galaxy Digital, Talos and Virtu to arrange conversions, the practical minimum contribution has fallen from roughly $30 million to about $1–2 million, and the coins are held with an affiliate of Coinbase Prime as IBIT’s custodian.
• Investors cite security fears — kidnappings, hacks and custody failures — as the main motive, and managers note that in‑kind transfers can often avoid an immediate capital‑gains sale and simplify estate planning though tax results depend on each holder’s facts.
• The shift moves custody risk from private keys to institutional custodians, can make ETF flow figures misleading because no new cash is required, and could push other managers to expand in‑kind acceptance and change how large holders store crypto.