Bitcoin Whales Can Switch to ETF Shares Without Selling: IBIT Threshold Drops From 25 Million to 1 Million

Bitcoin whales can now move with much lower amounts in transactions that allow them to switch to spot ETF shares without selling their holdings.

According to a Bloomberg report, BlackRock lowered the minimum amount required for direct conversion into IBIT, its spot Bitcoin ETF traded on Nasdaq, from $25 million to $1 million in July.

In this method, the investor delivers their Bitcoin directly to the fund instead of selling it on the market and receives ETF shares in return. This eliminates the need to first sell Bitcoin and then purchase the ETF. The process is known as direct conversion.

Thresholds drop in Bitcoin ETF conversions

BlackRock was not the only company to take this step. Bitwise also lowered the minimum limit required for similar Bitcoin transfers into its own ETF from $100 million to $3 million. The change allows investors holding large amounts of Bitcoin to choose more easily between self-custody in their own wallets and institutional fund custody.

The total amount of these conversions conducted through IBIT has exceeded $5 billion. Robbie Mitchnick, BlackRock’s Head of Digital Assets, stated that the volume was around $3 billion in October.

Mitchnick said that cryptocurrency thefts, kidnappings for ransom, and issues with custody services can lead some investors to move all or part of their assets into ETFs. These transactions do not represent new cash inflows; they represent the conversion of existing Bitcoin into fund shares.

A similar practice is not limited to Bitcoin. Companies like Grayscale and VanEck also allow investors to acquire fund shares for Ether ETFs without selling their holdings. Spot crypto ETFs have attracted billions of dollars in investment since their launch in 2024.