BlackRock Lowered Threshold for Swapping Bitcoin into Its ETF by 25 Times

• BlackRock lowered the minimum bitcoin transfer amount into its ETF from $25 million to $1 million.
• More than $5 billion in crypto has already been converted via the bitcoin-based IBIT fund.
• The in-kind mechanism is increasingly expanding to Ethereum and Solana, making it easier for large investors to move into traditional financial products.

Wall Street is making it easier for large bitcoin holders to move from self-custody to exchange-traded funds: investors can swap the first cryptocurrency directly for ETF shares without selling it for cash, Bloomberg reports. The in-kind creation mechanism is becoming more accessible and standardized, and BlackRock has already processed more than $5 billion of such conversions through its bitcoin ETF, IBIT.

BlackRock Lowered the Minimum Transaction Amount

Until recently, deals like these were mostly bespoke arrangements for the largest investors. However, after US regulators allowed ETF creation via the in-kind mechanism, the practice began to spread across the market.

In July, BlackRock lowered the minimum size of such a transaction from $25 million to $1 million. An investor transfers bitcoin to the fund and receives its shares in return. The transaction is executed by an authorized participant or a market maker.