BlackRock Lowers Crypto Conversion Threshold to $1 Million

BlackRock has made it easier for investors to convert their Bitcoin holdings into shares of its spot ETF IBIT, dropping the minimum threshold from $25 million to $1 million starting in July. This move reflects a broader trend among asset managers to build infrastructure that absorbs crypto wealth through regulated and standardized mechanisms.

The process involves so-called in-kind creations, which allow investors to transfer their Bitcoin directly to BlackRock's fund and receive ETF shares in return. This can avoid the immediate generation of capital gains tax liabilities and provide security against hacks or physical theft.

BlackRock's head of digital assets, Robbie Mitchnick, stated that people are motivated to make this change due to events such as kidnappings, ransoms, or custody failures. The IBIT fund has already processed over $5 billion in conversions, with the process taking more than a week. Inquiries come from both U.S. and international clients.

Other asset managers, including Bitwise, Morgan Stanley, Grayscale, and VanEck, are also adopting similar mechanisms for their funds. While infrastructure remains a limiting factor, with costs elevated due to the need for authorized participants to handle crypto assets, minimums could continue to fall as more intermediaries develop this capability.