BlackRock completes $5B in bitcoin-to-ETF swaps

BlackRock’s iShares Bitcoin Trust (IBIT) handled more than $5 billion in direct bitcoin-to-ETF conversions by late August 2026 after the firm lowered the minimum for in-kind creations from $25 million to $1 million in July.

In-kind or direct creations allow holders to transfer bitcoin into an ETF and receive shares in return rather than selling the coins for cash. The method moves custody into regulated structures and can, depending on an investor’s tax situation, postpone a taxable event tied to a sale.

Robbie Mitchnick, BlackRock’s head of digital assets, described the lower threshold as expanding access: “It’s going to keep growing because we keep expanding the access.”

Other issuers have reduced minimums or expanded support. Bitwise began with a $100 million minimum, later cut it to $50 million and now supports swaps from roughly $3 million. Matt Hougan, Bitwise’s chief investment officer, noted the work remains customized for each transaction but is becoming more standardized.

21Shares has completed in-kind transactions averaging about $5 million in recent months. Morgan Stanley reported that in-kind conversions represent roughly 5% to 7% of holdings in its roughly $560 million spot bitcoin ETF.

The practice extends beyond bitcoin. Grayscale increased in-kind activity for its products: gross in-kind bitcoin creations rose from 28% in March to 62% in June, while in-kind ether creations moved from 57% to 63% over the same period. Bitwise also supports swaps for ether and solana.

Transactions require authorized participants or market makers willing to accept crypto transfers, along with coordination among custodians and compliance teams. Those operational steps add cost and complexity compared with ordinary cash creations and redemptions and limit uptake among smaller retail investors.

Executives at asset managers point to expanding infrastructure and demand from holders as factors behind the rise in in-kind activity. Issuers have increased support for direct conversions this year, and market participants report continued growth in such transactions.