- BlackRock Bitcoin ETF has facilitated over $5 billion in in-kind BTC conversions.
- BlackRock lowered its minimum conversion size from $25 million to $1 million.
- Tax treatment varies, although the process avoids selling Bitcoin for cash first.
BlackRock Bitcoin ETF has facilitated more than $5 billion of in-kind Bitcoin conversions, according to Eric Balchunas. The total stood above $3 billion last October. The asset manager lowered IBIT’s minimum conversion size from $25 million to $1 million in July. These transactions let investors exchange Bitcoin for fund shares without first selling for cash. Any tax deferral depends on each investor’s circumstances and applicable law.
BlackRock Bitcoin ETF Expands Access to In-Kind Swaps
The BlackRock Bitcoin ETF receives Bitcoin while the investor receives corresponding IBIT shares. An authorized participant or market maker handles the asset transfer and fund-share creation.
Large holders can retain Bitcoin price exposure while moving away from private wallets and direct custody. With no prior cash sale, some investors may defer an immediate capital-gains bill, depending on their circumstances.
The SEC authorized in-kind creations and redemptions for crypto exchange-traded products in July 2025. Regulators said the mechanism could reduce costs and improve efficiency compared with cash-only transactions.
BlackRock’s digital-assets head said the conversion process can take more than one week. The firm has received inquiries from American and international clients. Custody failures, hacks and physical-security risks have also encouraged some holders to consider ETF shares.
Lower Thresholds Spread In-Kind Swaps Across Crypto Funds
The BlackRock Bitcoin ETF now accepts conversions from $1 million, the lowest reported minimum among the cited funds. Bitwise reduced its threshold from $100 million to $50 million, then lowered it to $3 million.
Morgan Stanley said in-kind conversions represent about 5% to 7% of its roughly $560 million Bitcoin ETF. Meanwhile, completed transactions at 21Shares averaged about $5 million during the past three months.
Grayscale also reported a rapid rise in the mechanism’s use. In-kind transactions represented 62% of gross Bitcoin creations in June, compared with 28% in March. Ether creations increased from 57% to 63%.
The BlackRock Bitcoin ETF trend now extends beyond Bitcoin products. Grayscale and VanEck use in-kind transactions for Ether funds. Bitwise also processes them for Ether and Solana products.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. CoinCryptoNewz is not responsible for any losses incurred. Readers should do their own research before making financial decisions.
