BlackRock IBIT Soaks Up $5 Billion in Bitcoin as Whales Flee Exchanges

BlackRock's iShares Bitcoin Trust (IBIT) has emerged as a major destination for large Bitcoin holders, who are increasingly moving their assets into regulated exchange-traded funds. The in-kind exchanges through BlackRock IBIT have now surpassed $5 billion, with eligible Bitcoin holders able to transfer BTC directly from personal wallets to the ETF in exchange for fund shares.

The original cost basis of the Bitcoin is carried over to those shares, allowing investors to restructure their exposure without an immediate taxable sale. This mechanism has become increasingly popular since BlackRock lowered the minimum threshold for in-kind conversions from $25 million to $1 million in July.

This change significantly broadened access for large investors and prompted competitors to respond, with Bitwise reducing its own conversion minimum from $100 million to $3 million as ETF providers competed for institutional Bitcoin capital. Security concerns are also contributing to the migration of wealthy Bitcoin investors to regulated institutional custody, according to BlackRock's head of digital assets.

The shift comes as Bitcoin whales continue selling on exchanges, creating supply that major funds can absorb away from public trading venues. Institutional demand extended beyond Bitcoin, with BlackRock's Ethereum ETF, ETHA, recording $131.94 million in session inflows.