It just got 25 times easier to move self-custody Bitcoin directly onto Wall Street, and $5 billion already has

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BlackRock cut the minimum for converting privately held Bitcoin into IBIT shares from $25 million to $1 million, while Bitwise lowered its floor from $100 million to $3 million. While this might sound like a niche development for a small number of institutional users, it signals that custody is no longer just a slogan for Wall Street.

BlackRock cut the minimum transaction size for a qualifying Bitcoin holder to convert coins directly into shares of its iShares Bitcoin Trust ETF from $25 million to $1 million in July, the company told Bloomberg. The 96% reduction now brings a service once reserved for the richest whales within reach of a much larger class of family offices and wealthy clients, and BlackRock says the program has processed more than $5 billion to date.

Bitwise made an even steeper cut, taking its minimum from $100 million for its first such transaction to $50 million and now $3 million. The cut reduced Bitwise’s threshold by 97%, and each conversion preserves exposure to Bitcoin price while placing the coins inside the fund’s custody structure.

The cheaper entry point is an important rethink of a decision once shaped by the execution costs and possible tax bill of selling coins, wiring dollars, and repurchasing exposure through an ETF. An in-kind conversion compresses those steps into one institutional transaction, giving the holder ETF shares that fit inside a brokerage account and the familiar systems that surround it.

A $1 million floor still excludes almost everyone, although it reaches far beyond the population able to commit $25 million or $100 million of Bitcoin to a single transaction. The lower threshold turns self-custody from a permanent identity into a service choice whose costs can be measured against an institutional alternative.

Provider and product Published conversion size Reduction One-time conversion charge Annual ETF fee Estimated annual fee at cited size Evidence of use
BlackRock IBIT $1 million minimum, down from $25 million 96% Undisclosed to the end client 0.25% $2,500 on $1 million More than $5 billion processed
Bitwise BITB $3 million minimum, down from $100 million through an interim $50 million floor 97% Undisclosed to the end client 0.20% $6,000 on $3 million Aggregate conversion volume undisclosed
Morgan Stanley and Galaxy $5 million lending minimum for referred clients, down from $25 million 80% Undisclosed and dependent on the client arrangement Varies by chosen ETP; MSBT charges 0.14% $7,000 on $5 million if converted into MSBT Onboarding can be shortened by as much as 75%
Grayscale GBTC or BTC No minimum published N/A Undisclosed to the end client 1.50% for GBTC; 0.15% for BTC $15,000 or $1,500 per $1 million In-kind transactions represented 62% of gross Bitcoin creations in June, versus 28% in March
ARK 21Shares ARKB No minimum published; completed transactions averaged about $5 million N/A Undisclosed to the end client 0.21% About $10,500 on a $5 million position Average completed transaction was about $5 million over three months

A whale service becomes a wealth-management product

In-kind creation is an institutional process reserved for authorized participants and eligible clients. A holder transfers Bitcoin through an authorized participant, the trust issues ETF shares at settlement, and the intermediary credits those shares to the holder’s account. Ordinary brokerage clients continue buying and selling IBIT shares for cash.

The SEC approved in-kind creations and redemptions for crypto exchange-traded products (ETPs) in July 2025, ending the original cash-only restriction that CryptoSlate examined through its effects on spreads, taxes, and flows.

IBIT’s operating documents allow an authorized participant or its client to deposit Bitcoin into the trust’s trading account for a creation order, with the trust issuing shares to the authorized participant at settlement.

That route removes a lot of friction for a wealthy holder who already owns BTC. Selling Bitcoin, wiring dollars, and repurchasing exposure through an ETF adds execution costs and can realize a taxable gain, while in-kind transactions may defer that gain for some holders. Because the tax result depends on the holder and legal structure, each conversion requires individual tax advice.

So what was once a bespoke transaction is becoming a repeatable service, and a Morgan Stanley and Galaxy referral program announced in June shows how the process is spreading into wealth management. Under the arrangement, an eligible client lends crypto to Galaxy, which coordinates an in-kind creation with an authorized participant before ETF shares arrive in the client’s chosen account. Galaxy cut its minimum for referred clients from $25 million to $5 million and said onboarding that can exceed four weeks may be shortened by as much as 75%.