BlackRock Scales Back IBIT Conversion Threshold
BlackRock has significantly reduced the minimum Bitcoin value required for direct conversion into shares of its spot Bitcoin ETF, IBIT. The previous threshold stood at $25 million, but BlackRock cut it by 96% to $1 million.
This change makes the service more accessible to wealthy investors and institutions that hold Bitcoin directly. Bitwise also lowered its conversion threshold sharply, reducing the minimum from $100 million to $3 million.
According to Robbie Mitchnick, head of digital assets at BlackRock, IBIT has processed over $5 billion in Bitcoin-to-ETF conversions, up from about $3 billion in October. The transactions use an in-kind creation process, allowing eligible holders to transfer Bitcoin into the ETF structure and receive IBIT shares with similar market exposure.
Security concerns, including hacks and crypto-related kidnappings, have pushed some holders to reconsider self-custody. An ETF removes the personal custody burden, but investors do not control the underlying Bitcoin and cannot withdraw the coins or use them for payments.