BlackRock's Bitcoin ETF Attracts Whales Amid Institutional Demand Surge

Bitcoin's recent rally has been supported by renewed institutional demand and increased activity among large Bitcoin holders, also known as whales. According to BlackRock's Senior ETF Analyst Eric Balchunas, the company has processed about $5 billion in Bitcoin-to-ETF swaps through its in-kind structure.

The mechanism allows eligible Bitcoin holders to defer recognition of capital gains rather than selling their Bitcoin for cash before purchasing ETF shares. The reduction of the minimum transaction size to $1 million has also made it more accessible to whales in addition to larger institutional clients, said Robbie Mitchnick, head of digital assets at BlackRock.

Bitcoin ETFs recorded $314.37 million in inflows on Tuesday, marking the seventh consecutive day of positive inflows. The total net asset value of the Bitcoin ETFs has climbed to $99.05 billion, representing approximately 6.31% of Bitcoin's total market capitalization.

Whale activity is also increasing, with Santiment data showing that the percentage of Bitcoin's total supply currently in profit has increased to 69.32%. This could signal stronger accumulation and support the formation of a market bottom or the continuation of a broader recovery.