Wealthy Investors Flee Self-Custody for BlackRock's IBIT Amid Rising Crypto Risks

Wealthy investors are increasingly turning to BlackRock's iShares Bitcoin Trust (IBIT) for their BTC holdings, with over $5 billion in in-kind conversions since its debut last summer. This trend is driven by a desire to move away from self-custody and towards regulated ETFs, according to Robbie Mitchnick, head of digital assets at BlackRock.

The minimum amount required for in-kind creations has been slashed from $25 million to just $1 million, making it easier for investors to swap their physical BTC for IBIT shares. This move comes as a response to recent custody failures and rising violent attacks against crypto investors.

In fact, top Bitcoin hardware wallets such as Ledger and Trezor have faced increased scrutiny after an attacker made off with over $100 million in coins. The trend is evident in on-chain data, with 210,000 BTC coins worth over $13 billion being moved amongst long-term holder (LTH) wallets after the Coldcard vulnerability fallout.