BlackRock's spot Bitcoin ETF (IBIT) has processed more than $5 billion in conversions from direct Bitcoin holdings to ETF shares, according to Bloomberg ETF analyst Eric Balchunas. The milestone marks a sharp increase from the $3 billion recorded in October of last year.
The growth follows BlackRock's decision in July to lower the minimum limit for private in-kind creations on its Bitcoin ETF from $25 million to $1 million, enabling a broader range of investors to perform tax-deferred swaps. These conversions allow crypto whales to retain exposure to Bitcoin while moving their wealth out of private wallets and crypto platforms and into traditional financial structures.
Robbie Mitchnick, head of digital assets at BlackRock, stated that access continues to expand and that external factors such as custody failures, ransom risks, and kidnappings motivate holders to make the switch.
Bloomberg's analysis noted that similar trends occurred with Bitwise’s BITB, while Morgan Stanley’s MSBT attracted roughly 5% to 7% of its total assets under management through Bitcoin-to-ETF swaps.
Market Movements and Inflows
Amid these developments, the price of Bitcoin declined more than 2% over a 24-hour period, trading near $79,000 ahead of the U.S. PCE inflation data release. Over the same timeframe, the 24-hour low and high were recorded at $77,954 and $80,838, respectively. Trading volume also decreased by nearly 40% as Federal Reserve official Susan Collins indicated support for a rate hike if higher inflation persists.
Despite the broader price dip, spot Bitcoin ETFs registered $314.3 million in net inflows on Tuesday. BlackRock's IBIT led the activity with $284.4 million in inflows, accompanied by positive flows into Fidelity’s FBTC, Bitwise’s BITB, the Grayscale mini Bitcoin ETF, and Morgan Stanley’s MSBT.
Meanwhile, derivatives markets reflected cautious sentiment and profit booking. CoinGlass data indicated that total BTC futures open interest fell 4.7% to $55.69 billion over a 24-hour period, with CME and Binance futures open interest dropping by nearly 6% and 3%, respectively.
