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BlackRock reports record demand to convert self-custodied bitcoin into ETF shares over security concerns

Large bitcoin holders are converting directly held crypto into BlackRock's spot Bitcoin ETF at record levels, driven by the risks and complexities of managing their own holdings.

BlackRock company logo in white text on a black background.
Image: @blocknewsdotcom

Demand from large bitcoin holders to convert self-custodied bitcoin into shares of BlackRock's spot Bitcoin ETF, IBIT, has surged to record levels, according to BlackRock Head of Digital Assets Robbie Mitchnick in remarks reported by Barron's. The primary driver behind the transition is growing concern over the security challenges involved in managing and safeguarding direct crypto holdings.[2][4][5][6]

The report cited roughly $3.6 billion in such conversions, noting that the actual total may be even higher as BlackRock anticipates billions of dollars in crypto moving into exchange-traded funds. The conversions are executed via in-kind transactions, which allow investors to swap existing bitcoin directly for ETF shares without having to sell their tokens on the open market. Consequently, the volume reflects a structural shift in custody arrangements among major holders rather than fresh capital inflows into the asset.[1][3][6]

Key facts

  • Robbie Mitchnick, BlackRock's Head of Digital Assets, stated that demand from large holders converting self-custodied bitcoin into IBIT shares reached record levels, according to Barron's.
  • Security concerns surrounding managing direct cryptocurrency holdings are the primary driver behind the conversions.
  • Approximately $3.6 billion in conversions was reported, with the actual total potentially higher.
  • In-kind transactions allow investors to swap existing bitcoin for ETF shares without selling on the market, marking a custody transfer rather than net new capital inflows.
  • BlackRock anticipates billions of dollars in crypto assets will migrate into ETFs.

Sources 路 6 sources

  1. WG

    Watcher.Guru@WatcherGuruPost on X 路

    JUST IN: $15 trillion BlackRock expects billions of dollars in crypto to move into ETFs over security concerns.

    Open source
  2. BM

    Bitcoin Magazine@BitcoinMagazinePost on X 路

    JUST IN: The world's largest asset manager BlackRock says demand is surging to convert self-custodied bitcoin into ETF shares, citing security concerns 馃憖 https://t.co/OooqwFn1eN

    Open source
  3. KC

    Kalshi Crypto@Kalshi_CryptoPost on X 路

    JUST IN: BlackRock expects billions of dollars in crypto to move into ETFs over security concerns

    Open source
  4. BL

    BlockNews@blocknewsdotcomPost on X 路

    馃毃 JUST IN: BlackRock, the world's LARGEST asset manager, says demand is SURGING to convert self-custodied Bitcoin $BTC into ETF shares! https://t.co/TrVJGIg6pL

    Open source
  5. CN

    crypto.news@cryptodotnewsPost on X 路

    LATEST: BlackRock reports rising demand to move self-custodied Bitcoin into ETFs The world鈥檚 largest asset manager says more investors are converting directly held $BTC into ETF shares, citing security concerns around managing their own crypto holdings. https://t.co/FapL6F7gA0

    Open source
  6. WB

    Wu Blockchain@WuBlockchainPost on X 路

    BlackRock Sees Record Demand From Bitcoin Whales Converting BTC Into IBIT Over Security Concerns According to Barron's, BlackRock's Head of Digital Assets, Robbie Mitchnick, said demand from large Bitcoin holders seeking to convert self-custodied BTC into shares of BlackRock's spot Bitcoin ETF (IBIT) has reached record levels, primarily driven by security concerns. The report cited approximately $3.6 billion in such conversions, with the actual total potentially higher. Through in-kind transactions, investors can exchange existing BTC holdings for ETF shares without first selling their Bitcoin on the market. These conversions represent a shift in custody arrangements rather than necessarily new capital inflows into Bitcoin.

    Open source