BlackRock cut the minimum for swapping Bitcoin (BTC) into ETF shares to $1 million from $25 million, after processing more than $5 billion in such conversions.
Key Points:
- BlackRock lowered its in-kind conversion floor for the iShares Bitcoin Trust by 96%, opening the service to a far wider set of holders.
- Cumulative Bitcoin-to-ETF swaps through the fund have passed $5 billion, roughly double the total from October.
- Bitwise and Morgan Stanley have cut their own thresholds as a summer of hardware wallet failures pushed owners toward regulated custody.
Bitcoin ETF Swap Minimum Drops To $1 Million
The asset manager lowered the threshold for in-kind creations in its iShares Bitcoin Trust, which trades as IBIT, back in July. Details of the 96% reduction emerged this week. The cut applies to the fund's creation process, not to ordinary share purchases on Nasdaq, which carry no minimum.
In-kind creation lets an eligible holder hand Bitcoin to the fund and take shares in return, instead of selling the coins for cash first. The structure can defer the capital gains that a sale would trigger, and it removes the burden of guarding seed phrases and hardware wallets.
Regulators opened the door in July 2025, when the Securities and Exchange Commission permitted in-kind creations and redemptions for spot crypto exchange-traded products. Only authorized participants deal directly with the trust, so a holder still needs a broker or a trading desk to arrange the swap.
The fund held about $60.65 billion in net assets on Aug. 25, charged a 0.25% sponsor fee and carried about 22.65 Bitcoin in each creation basket.
Also Read: Bitcoin Touched $81,000 Then Cooled As Overbought Signals Flashed Red
Mitchnick Ties Bitcoin Swaps To Custody Failures
Robbie Mitchnick, BlackRock's head of digital assets, said IBIT has now processed more than $5 billion through these transactions, up from roughly $3 billion in October. He tied the demand to kidnappings, ransom cases and custody failures that push owners to move part or all of their holdings into a regulated wrapper.
Rival issuers have gone the same way. Bitwise dropped its own floor to $3 million from $100 million, and Morgan Stanley has trimmed its threshold as well. At Grayscale, in-kind settlement rose to 62% of gross Bitcoin creations in June from 28% in March, according to the firm's head of trading and capital markets.
Coldcard Breach Reshaped Bitcoin Self-Custody
The swaps do not create fresh demand for the coin, because they simply repackage supply that already exists. What changed this summer was the perceived safety of the alternative.
Attackers exploited a 2021 firmware flaw in Coinkite's Coldcard wallets starting July 30 and drained about 1,816 Bitcoin, worth roughly $116 million, from more than 5,200 addresses.
Glassnode data showed some 210,000 Bitcoin left long-term holder wallets in the week that followed, the steepest weekly decline in that cohort since December 2024. Analysts read the exodus as a migration of custody rather than selling, because Bitcoin was trading near $64,000 at the time, roughly 50% below its October 2025 record.
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