BlackRock cuts IBIT Bitcoin conversion minimum 25-fold as over $5 billion moves

BlackRock cut the minimum transaction size for converting privately held Bitcoin into shares of its iShares Bitcoin Trust ETF from $25 million to $1 million in July. The program has processed more than $5 billion, according to BlackRock. Bitwise lowered its minimum from $100 million to $3 million. Each in-kind conversion preserves Bitcoin price exposure while placing the coins inside the fund's custody structure. A holder transfers Bitcoin through an authorized participant. The trust issues ETF shares at settlement. The intermediary credits the shares to the holder's brokerage account. Ordinary brokerage clients continue buying and selling IBIT shares for cash. The SEC approved in-kind creations and redemptions for crypto exchange-traded products in July 2025. In-kind transactions can reduce execution costs and may defer a taxable gain for some holders. Tax treatment depends on the holder and legal structure. Morgan Stanley and Galaxy announced a referral program in June for eligible clients. Galaxy coordinates in-kind creations with an authorized participant after a client lends crypto to Galaxy. Galaxy lowered its minimum for referred clients from $25 million to $5 million. Galaxy said onboarding that can exceed four weeks may be shortened by as much as 75%. Grayscale completed 62% of its gross Bitcoin creations in kind in June. Grayscale's share was 28% in March. Completed transactions at 21Shares averaged about $5 million over the three months through July, according to Bloomberg. Bitbo counted 1,246,336 BTC across 13 U.S. spot Bitcoin funds on Aug. 25. That amount represented 5.935% of Bitcoin's 21 million total supply. IBIT held 765,389.9 BTC, or 3.645% of the supply. BlackRock listed IBIT's net assets at $60.65 billion on the same date. BlackRock digital-assets head Robbie Mitchnick said kidnappings, ransom demands, and custody failures can motivate holders to move some or all of their coins into an ETF. BlackRock has not broken down the $5 billion by motive. Chainalysis documented 46 violent crypto incidents through late June and estimated that attackers stole more than $30 million in the first half of 2026. CertiK counted 52 verified incidents during the first half of 2026. CertiK recorded $124.1 million in exposure and reported a 33.3% year-over-year increase. CertiK counted 20 home invasions, up from one. CertiK counted 16 kidnappings, up from 12. IBIT charges a 0.25% annual sponsor fee. IBIT depends on brokerage and market infrastructure. Direct custody preserves the ability to withdraw, transfer on-chain, and verify assets in a personal wallet. Funds connected to Coinbase in some custody capacity represented 84.1% of U.S. Bitcoin ETF assets under a broad calculation. A stricter calculation reached 80.8%, or about $74.06 billion. The exact allocation of coins among custody providers was undisclosed. BlackRock's documents name Anchorage as an available additional custodian. ARK has listed Coinbase, BitGo, and Anchorage as custodians. Fidelity uses its own digital-asset subsidiary. VanEck uses Gemini. Farside data showed that U.S. spot Bitcoin ETFs received $2.57 billion across seven positive sessions from Aug. 17 through Aug. 25. IBIT received $1.82 billion, or 71% of the total. Direct Bitcoin conversions and daily ETF net inflows measure different activity. Investors can send new capital into ETF shares while existing holders move Bitcoin they already own into the funds.