BlackRock’s spot Bitcoin ETF has processed more than $5 billion in conversions from direct Bitcoin holdings into ETF shares, according to data from Bloomberg ETF analyst Eric Balchunas. This swap mechanism allows large Bitcoin holders to transition their coins into the ETF structure without triggering an immediate taxable sale, enabling them to maintain their exposure through a traditional investment vehicle.
The $5 billion milestone represents a notable increase from the $3 billion recorded last October, indicating an acceleration in the pace of conversions. The growth has been supported by a policy change in July, when BlackRock lowered the minimum threshold for private in-kind creations on its Bitcoin ETF from $25 million down to $1 million, thereby broadening access for wealthy investors.
Robbie Mitchnick, head of digital assets at BlackRock, noted that the trend is expected to continue growing alongside expanded access, with external events such as custody concerns prompting investors to make the switch. Similar activity has been observed at other firms, including Bitwise, while Morgan Stanley’s Bitcoin ETF has drawn between 5% and 7% of its total assets under management through comparable swaps.
Meanwhile, broader market activity saw Bitcoin trade near $79,000, slipping over 2% over a 24-hour period ahead of the release of United States inflation data, the PCE index. Federal Reserve official Susan Collins commented that she would support a rate hike if inflation remains persistent, contributing to market caution.
Despite the downward price movement and a nearly 40% drop in trading volume, spot Bitcoin ETFs recorded $314.3 million in net inflows. BlackRock’s fund led the category with $284.4 million, while additional inflows were registered by funds from Fidelity, Bitwise, the Grayscale mini Bitcoin fund, and Morgan Stanley. Concurrently, derivatives market data from CoinGlass indicated that total Bitcoin futures open interest declined by 4.7% to $55.69 billion.
