BlackRock has reported record demand from large Bitcoin holders seeking to convert their cryptocurrency into shares of its iShares Bitcoin Trust (IBIT), with security concerns driving approximately $3.6 billion in reported transactions.
Summary
- BlackRock reports approximately $3.6 billion in Bitcoin-to-IBIT conversions, driven primarily by investors’ growing security concerns.
- Robbie Mitchnick said demand for Bitcoin conversions has reached record levels despite recent cryptocurrency volatility.
- BlackRock’s IBIT recorded $213.2 million in outflows on November 9, extending its seven-session withdrawal streak.
- The SEC authorized in-kind cryptocurrency ETF creations and redemptions in July 2025 through approved intermediaries.
- Grayscale expanded in-kind transfers across ten digital asset products, including Bitcoin, Ethereum, Solana and XRP.
According to Robbie Mitchnick, BlackRock’s head of digital assets, demand for in-kind Bitcoin conversions has continued growing despite recent cryptocurrency price declines. Speaking to Barron’s on November 9, Mitchnick said investors increasingly prefer holding Bitcoin exposure through regulated investment products instead of managing large cryptocurrency balances themselves.
BlackRock reports $3.6 billion in Bitcoin ETF conversions
BlackRock has recorded approximately $3.6 billion in Bitcoin-to-IBIT conversions since US regulators authorized in-kind transactions for cryptocurrency exchange-traded products in July 2025.
The actual amount may be higher because BlackRock does not directly process or track every transaction completed through its intermediaries.
Mitchnick described current interest as “the highest we’ve seen at any point”, pointing to continued demand among wealthy individuals and institutional Bitcoin holders.
He identified “security and peace of mind” as the main reasons investors request the service, particularly those seeking alternatives to managing private keys and maintaining large cryptocurrency balances in personal wallets.
Through in-kind conversions, eligible investors transfer existing Bitcoin into the ETF structure and receive shares representing their investment.
The transactions involve authorized participants and other approved intermediaries responsible for arranging the creation of ETF shares.
BlackRock works with firms including Galaxy Digital, Talos and Virtu to facilitate conversions, while minimum transaction requirements depend on the intermediary.
The practical minimum has fallen from approximately $30 million to around $1 million to $2 million, expanding access beyond the largest cryptocurrency holders.
As crypto.news previously reported, BlackRock lowered its conversion threshold during 2026 as institutional demand developed.
Bitcoin conversions continue as BlackRock IBIT records outflows
The reported conversion demand comes during a period of withdrawals from US-listed spot Bitcoin ETFs.
According to Farside Investors, BlackRock’s IBIT recorded $213.2 million in net outflows on November 9, its seventh consecutive trading session of withdrawals.
Since October 30, the fund has recorded approximately $1.66 billion in net withdrawals.
Across the US spot Bitcoin ETF market, Monday’s net outflows reached $201 million. Morgan Stanley’s MSBT received $22.1 million, partly offsetting withdrawals from IBIT and other funds.
The previous trading session saw $411.9 million leave spot Bitcoin ETFs, including $403 million from BlackRock’s fund.
During November’s first trading week, the products recorded approximately $1.28 billion in net withdrawals, with IBIT accounting for roughly $1.21 billion.
The figures followed a period of continued Bitcoin ETF withdrawals as Bitcoin traded near $75,000.
In-kind conversions and daily ETF flows measure different activities. Conversions involve transferring existing cryptocurrency into an investment product, while net flows track the difference between fund creations and redemptions.
An existing Bitcoin holder can therefore change how the asset is held without necessarily introducing new investment capital into cryptocurrency.
The Bitcoin ETF redemption process can involve cash or Bitcoin transfers, depending on the fund’s procedures and the arrangements used by authorized participants.
SEC approval allows Bitcoin holders to exchange coins for ETF shares
The US Securities and Exchange Commission approved in-kind creations and redemptions for cryptocurrency exchange-traded products on July 29, 2025.
Before the decision, US spot Bitcoin and Ethereum funds generally used cash-based creation and redemption arrangements.
Under the newer framework, authorized participants can deliver the underlying cryptocurrency to create shares or receive cryptocurrency when redeeming them.
SEC Chairman Paul Atkins said the changes would make the products “less costly and more efficient.”
The approval brought cryptocurrency investment products closer to the creation and redemption procedures used by other commodity-based exchange-traded products.
For eligible holders, the conversion process allows Bitcoin exposure to move into brokerage accounts without a preliminary sale for cash.
Shares may then be managed alongside other securities and, where permitted, incorporated into collateral arrangements, estate planning or options strategies.
Tax treatment depends on the transaction structure and the investor’s circumstances. An in-kind transfer does not automatically guarantee that no taxable event occurs.
Grayscale expands in-kind crypto transfers to 10 products
Other asset managers have introduced similar services for investors seeking to move cryptocurrency holdings into conventional investment accounts.
On October 21, Grayscale announced in-kind contributions across ten digital asset investment products.
The eligible products include funds linked to Bitcoin, Ethereum, Solana, XRP, Avalanche, Chainlink, Dogecoin, Hyperliquid, Sui and Zcash.
As of October 20, Grayscale’s published minimum contribution ranged from approximately $80,300 for its Solana Staking ETF to $364,800 for its Bitcoin Mini Trust ETF.
Steve Vanourny, Grayscale’s head of index, said institutional custody was becoming increasingly relevant as investors considered cybersecurity risks.
He cited “growing cybersecurity threats” involving self-custody and decentralized finance platforms.
Grayscale said eligible investors could contribute supported cryptocurrencies directly in exchange for fund shares, subject to product requirements and applicable transaction arrangements.
