Blackrock has processed more than $5 billion in direct bitcoin-to-ETF conversions after cutting its minimum swap size from $25 million to $1 million. Bitwise, Grayscale, and 21Shares are seeing similar growth in these in-kind conversions, and the model is now extending to ether and solana. The shift comes as Bitcoin has climbed about 24% since August 17 to reach $80,000.
Blackrock cuts its entry threshold
Blackrock's iShares Bitcoin Trust has processed more than $5 billion in direct bitcoin-to-ETF conversions, according to Robbie Mitchnick, the firm's head of digital assets. Investors contribute bitcoin directly to the spot bitcoin ETF and receive shares in return, preserving market exposure while moving custody into the conventional financial system.
Blackrock cut the minimum size for these swaps from $25 million to $1 million in July, when the service first became available at that lower threshold. According to Bloomberg: "It's going to keep growing because we keep expanding the access", Mitchnick said.
Bitwise and other issuers follow
Bitwise has followed a similar path, lowering its own in-kind minimum from an initial $100 million requirement to $50 million and now $3 million. Bitwise Chief Investment Officer Matt Hougan said the process remains bespoke but is becoming increasingly standardized.
At 21Shares, completed in-kind transactions over the past three months have averaged about $5 million. Morgan Stanley said such conversions account for roughly 5% to 7% of holdings in its approximately $560 million spot bitcoin ETF. Investors moving bitcoin this way can reduce reliance on private custody of keys and wallets, and depending on individual tax circumstances, exchanging bitcoin rather than selling it for cash may avoid an immediate taxable event.
Ether and solana join the shift
Grayscale uses in-kind transactions for ether products, while Bitwise supports conversions for both ether and solana. At Grayscale, gross bitcoin creations done in-kind rose from 28% in March to 62% in June, while gross ether creations done the same way rose from 57% to 63% over the same period.
Transactions still require authorized participants or market makers willing to handle crypto, which adds cost and complexity. But as minimums fall and more intermediaries enter the market, direct swaps from bitcoin, ether, and solana into ETF shares are moving toward a more standardized part of institutional crypto investing.
Sources: Bitcoin.com News, CryptoPotato
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