BlackRock Lowers IBIT Threshold to $1 Million Amid Growing Security Concerns

BlackRock has reduced its minimum in-kind creation threshold for its iShares Bitcoin Trust (IBIT) to $1 million, marking a significant decrease of 96% from $25 million.

The move comes as more than $5 billion in Bitcoin has been moved into IBIT, with the process allowing holders to convert their BTC exposure into ETF shares without requiring a direct cash sale. This shift is part of a broader trend of investors moving away from self-custody due to security concerns.

IBIT's Head of Digital Assets, Robbie Mitchnick, noted that kidnappings, ransom demands, hacks, and custody failures can influence decisions about self-custody, leading some holders to opt for an ETF structure. However, it's worth noting that IBIT shareholders do not have direct control over their underlying Bitcoin, as they hold exchange-traded shares designed to track Bitcoin's value before fees and expenses.