BlackRock Processes $5 Billion in Direct Bitcoin-to-ETF Conversions

Wall Street is simplifying the move from self‑custody of digital assets to exchange‑traded funds (ETFs) by allowing investors to swap bitcoin, ether and solana directly for ETF shares without first converting to cash.

Lowered minimums expand access

BlackRock reduced the in‑kind conversion minimum for its iShares Bitcoin Trust (IBIT) from $25 million to $1 million in July. Since then, IBIT has processed more than $5 billion of direct bitcoin‑to‑ETF swaps, according to BlackRock’s head of digital assets.

Bitwise followed a similar trajectory, cutting its minimum from $100 million to $3 million. The firm now supports in‑kind swaps for bitcoin, ether and solana.

Growing adoption across issuers

Grayscale’s in‑kind bitcoin creations rose from 28 % in March to 62 % in June, while in‑kind ether creations increased from 57 % to 63 % over the same period.

21Shares reported an average of about $5 million per in‑kind transaction over the past three months, and Morgan Stanley estimates such conversions represent roughly 5 % to 7 % of holdings in its $560 million spot bitcoin ETF.

Benefits and challenges

Direct swaps preserve market exposure, reduce reliance on private keys, and may defer taxable events for some investors. However, transactions still require authorized participants or market makers, adding cost and operational complexity.

As minimums fall and more intermediaries enter the space, in‑kind conversions are shifting from a niche service for large holders toward a more standardized component of institutional crypto investing.