BlackRock Facilitates Over $3 Billion in Bitcoin-to-ETF Conversions for Whales

Large investors are increasingly converting their Bitcoin holdings into ETFs, with BlackRock alone facilitating over $3 billion worth of BTC-to-ETF conversions.

The move comes following the SEC’s approval of an in-kind transaction for Bitcoin ETFs. While this conversion is common with traditional ETFs, the SEC approved in-kind transactions for crypto-related funds in July.  

Following the approval, several large investors began exchanging their BTC holdings for ETF shares, without selling a single token. This process allows them to transfer their Bitcoin directly into an ETF in exchange for shares of the fund, instead of cash. 

According to Mitchnick, large investors are waking up to the reality of being able to maintain their exposure to Bitcoin within their existing financial advisor. He suggested that conversions will spike significantly as regulatory clarity continues.

However, Mitchnick declined to comment on the exact number of conversions BlackRock has facilitated through its IBT ETF so far. 

Moreover, he pointed out that clients’ inquiries have spiked lately, with some investors seeking to convert only 20% of their Bitcoin holdings, while others are moving all their BTC holdings to ETFs. 

Bitwise and Galaxy Confirm Strong Interest in Bitcoin-to-ETF Conversions 

Besides BlackRock, asset manager Bitwise also confirmed that it is receiving daily inquiries from its wealthy clients regarding the conversion. Similarly, Galaxy has also helped some of its clients to process these Bitcoin-to-ETF conversions.

Despite converting BTC to shares of Bitcoin ETFs, investors will still maintain their underlying exposure to the apex cryptocurrency. With these shares stored in a brokerage account, investors can use them as collateral or even include them in an estate plan. These things are complicated for self-custodied Bitcoin. 

Indeed, interest in Bitcoin ETFs remains strong, with the products collectively recording $61.46 billion in inflows in less than two years. BlackRock’s IBIT ETF leads the pack, accounting for approximately $64.88 billion in inflows and boasting $88.92 billion in AUM as of October 20.