TLDR
BlackRock cut the minimum Bitcoin value required for direct IBIT conversions from $25 million to $1 million.
The 96% reduction makes the service more accessible to wealthy investors and institutions holding Bitcoin directly.
IBIT has processed more than $5 billion in Bitcoin-to-ETF conversions, up from about $3 billion in October.
Bitwise also lowered its conversion threshold sharply, reducing the minimum from $100 million to $3 million.
Security concerns, including hacks and crypto-related kidnappings, are encouraging some holders to move away from self-custody.
BlackRock has reduced the minimum Bitcoin value needed for direct conversion into shares of its spot Bitcoin ETF, IBIT, to $1 million. Bloomberg reported that the previous threshold stood at $25 million, marking a 96% cut.
The change makes the service available to more wealthy investors and institutions that hold Bitcoin directly. Bitwise also reduced its conversion minimum to $3 million from $100 million, according to the same report. BlackRock reported IBIT net assets of about $60.65 billion on Aug. 25, while the fund charged a 0.25% annual sponsor fee.
BlackRock sees growth in in-kind conversions
The transactions use an in-kind creation process. Eligible holders transfer Bitcoin into the ETF structure and receive IBIT shares with similar market exposure. This process removes the need to sell Bitcoin first and then buy ETF shares.
Robbie Mitchnick, BlackRock’s head of digital assets, said IBIT has processed more than $5 billion through these conversions. The total was about $3 billion in October. These transfers move existing Bitcoin into the fund and do not always represent new cash inflows.
Security concerns drive custody changes
Mitchnick said hacks, kidnappings, and other crypto-related crimes have pushed some holders to reconsider self-custody. Investors who hold Bitcoin directly must protect private keys, seed phrases, and hardware wallets from theft or loss.
An ETF removes that personal custody burden. However, IBIT shareholders do not control the underlying Bitcoin. They cannot withdraw the coins, send them to a private wallet, or use them for payments. They instead hold Nasdaq-listed shares that track Bitcoin’s market value before fees.
Tax treatment depends on structure
Bloomberg reported that some investors can use in-kind conversions to avoid selling Bitcoin before buying ETF shares. That structure may help them avoid triggering an immediate taxable sale in some cases.
However, tax treatment can vary by investor, intermediary, country, and transaction structure. The SEC approved in-kind creations and redemptions for spot crypto exchange-traded products in July 2025, but the rule did not create special tax treatment for investors. BlackRock’s latest filings confirm that authorized participants can conduct in-kind transactions with the trust. Ordinary investors can still buy and sell IBIT shares on Nasdaq without using the direct creation process or meeting these thresholds.
