BTC-to-ETF Swaps Hit $5B
BlackRock cut the minimum for converting bitcoin directly into IBIT shares from $25 million to $1 million, per a Bloomberg report — and cumulative in-kind conversions have passed $5 billion, up from about $3 billion in October, per BlackRock's Robbie Mitchnick, who cited kidnappings, ransom and custody failures as motivation. The swaps defer capital-gains tax by avoiding a sale, move existing coins into the fund rather than adding new cash, and the practice is spreading: Bitwise cut its threshold to $3 million.
In-Kind Swaps: the tax quirk doing the real work
Everyone's blaming fear. Kidnappings, custody thefts and failures. All real, all cited by BlackRock's own Robbie Mitchnick.
But buried in the reporting is the quieter reason wealthy holders are handing their coins to IBIT: swapping bitcoin for ETF shares lets them keep their exposure without triggering a tax bill. You're not selling, so there's nothing to tax yet.
BlackRock dropped the minimum for these swaps from $25m to $1m. Bitwise followed, cutting its own to $3m. A tax-free exit from self-custody is now cheap enough to walk through.
The coins that anchored the whole self-custody idea are quietly pooling under one roof. The tax code is what's greasing the move.
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3 sources
- BlackRock attracts $5B as investors swap physical BTC for IBIT shares – Coldcard effect? · ambcrypto.com · T2
- Bitcoin Whales Have Moved $5B Into BlackRock’s IBIT: Here’s Why · cryptopotato.com · T2
- Bitcoin holds $78,456 as whales move $614 million, BlackRock absorbs supply · en.coin-turk.com · T2