Bitcoin Whales Flock to ETFs as Wall Street Makes Crypto Swaps Easier

Bitcoin whales are increasingly moving their wealth from private wallets and crypto platforms into mainstream finance. Wall Street is making it easier for investors to swap large crypto holdings for shares in exchange-traded funds, allowing them to retain exposure to Bitcoin while gaining some of the protections of a conventional financial product.

BlackRock Inc. has cut the minimum size for such transactions to $1 million in July from $25 million when the process first became available. This change is part of a trend that began with a bespoke service for the very wealthy, but is now becoming more routine.

The in-kind creation process allows investors to swap crypto for ETF shares without triggering an immediate capital-gains tax bill, depending on the investor's circumstances. Robbie Mitchnick, head of digital assets at BlackRock, said: 'It's going to keep growing because we keep expanding the access.'

The scale is already material at BlackRock, with its IBIT fund facilitating more than $5 billion of such conversions since US regulators permitted in-kind creations last summer.