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Whales Shift Over $3 Billion of Bitcoin Into BlackRock ETF Via In‑Kind Conversions

A summer SEC policy allowing in‑kind ETF creations opened a tax‑efficient path for large holders to swap on‑chain coins for brokerage‑held shares.

Overview

  • BlackRock’s head of digital assets Robbie Mitchnick said more than $3 billion of bitcoin has been converted into iShares Bitcoin Trust (IBIT) through in‑kind creations, according to Bloomberg.
  • The in‑kind structure lets authorized participants deliver bitcoin for fund shares without a recorded sale, a setup commonly described as tax‑neutral in coverage of these transactions.
  • Some large holders are moving coins from self‑custody to ETF shares held in brokerage accounts to pledge as collateral or integrate into estate plans, Bloomberg reported.
  • Analysts and industry voices reported the first notable decline in self‑custodied bitcoin in roughly 15 years as holdings consolidate into regulated custody.
  • Other managers are seeing traction, with Bitwise reporting daily client inquiries and Galaxy noting a handful of processed conversions, as international markets roll out regulated spot products in Australia, the UK and Costa Rica.