BlackRock has reduced the minimum Bitcoin required for in-kind conversions of its iShares Bitcoin Trust (IBIT) shares from $25 million to $1 million, making the mechanism accessible to a broader range of eligible investors. The asset manager ultimately intends to eliminate the minimum threshold entirely, according to Robbie Mitchnick, BlackRock's head of digital assets.

Threshold Reduction Details

Bloomberg ETF analyst Eric Balchunas reported the change following a conversation with Mitchnick. The new $1 million minimum replaces the prior $25 million requirement for in-kind Bitcoin conversions into IBIT shares. In-kind conversions allow authorized participants to deliver Bitcoin directly to the fund rather than selling it for cash first, which can reduce transaction costs and potential tax friction compared with cash-based creations and redemptions.

Under the process, individual investors do not transact directly with BlackRock. Authorized participants handle conversions between Bitcoin and IBIT shares. Mitchnick noted that in-kind creations and redemptions still represent a minority of overall Bitcoin ETF activity, with most inflows arriving as new cash. However, in-kind activity has grown since regulators approved the mechanism. The lowered threshold broadens the set of institutional participants for whom in-kind conversion is practical, potentially increasing its share of total ETF flow over time.

According to Mitchnick, BlackRock's long-term goal is to offer in-kind conversions with no minimum transaction size at all, which would remove the current $1 million threshold and further align the Bitcoin ETF creation-redemption process with conventions used in broader commodity and equity ETF markets.

Coldcard Hack and Custody Considerations

During the same Bloomberg interview, Mitchnick addressed the recent Coldcard wallet hack. He characterized the incident as a security failure rather than a Bitcoin network breach, attributing the vulnerability to human error. Wallet or service breaches, he said, are matters of individual security management.

Mitchnick emphasized that Bitcoin ETFs provide exposure without requiring investors to manage private keys themselves, reinforcing the custody advantage that regulated fund structures offer relative to self-custody. He also said BlackRock has not observed widespread panic among ETF investors during Bitcoin's recent price decline, describing the ETF investor base as oriented toward long-term holding.

IBIT Leads Weekly Bitcoin ETF Inflows

Bitcoin ETFs recorded approximately $1 billion in weekly inflows, according to the supplied data. Farside Investors data showed that roughly $865 million entered U.S. spot Bitcoin funds during the period. IBIT received $693.5 million, while Fidelity's FBTC attracted $116.5 million, placing IBIT ahead of all other funds listed. IBIT has consistently ranked as the largest U.S. spot Bitcoin ETF by assets under management since launching in January 2024 alongside ten other approved funds, and its continued inflow lead underscores its dominance among institutional and retail allocators seeking regulated Bitcoin exposure.

Mitchnick also discussed BITA, BlackRock's Bitcoin premium-income ETF, which targets mid-to-high-teens yield with reduced volatility, though he expects its growth to be slower than IBIT's.

Additionally, he noted that Bitcoin has passed through five major boom-and-bust cycles and pointed to its recent decorrelation from equities as evidence of its diversification potential.