BlackRock's Head of Digital Assets Robbie Mitchnick confirmed record demand from large Bitcoin holders converting self-custodied BTC into shares of IBIT, the firm's spot Bitcoin ETF. Approximately $3.6 billion in Bitcoin has flowed through these in-kind transactions, with Mitchnick indicating the actual total could be higher.
The shift is driven by security concerns tied to self-custody of significant Bitcoin holdings. Large investors are trading individual key management for institutional-grade custody and regulatory oversight embedded in the ETF structure.
In-kind conversions allow holders to exchange existing Bitcoin directly for ETF shares without selling on the open market, eliminating price impact and streamlining the process.
This activity represents a reallocation of existing Bitcoin holdings rather than new capital entering the ecosystem. It signals a preference among whale holders for regulated, custodied vehicles over solo private-key management.
Spot Bitcoin ETF approval in January 2024 opened this pathway for institutional and large-scale retail investors to gain Bitcoin exposure without direct asset stewardship. IBIT has emerged as a primary vehicle in this new infrastructure.
