Large investors are increasingly converting their Bitcoin holdings into ETFs, with BlackRock alone facilitating over $3 billion worth of BTC-to-ETF conversions.
This move follows the SEC’s approval of in-kind transactions for Bitcoin ETFs.
While such conversions are common with traditional ETFs, the SEC approved in-kind transactions for crypto-related funds in July.
Following the approval, several major investors began exchanging their BTC holdings for ETF shares without selling any tokens.
This process allows them to transfer Bitcoin directly into an ETF in exchange for fund shares rather than cash.
BlackRock Facilitates Over $3B Conversion
Since SEC approval of in-kind Bitcoin ETF transactions, BlackRock’s Head of Digital Assets Robbie Mitchnick confirmed the firm has processed over $3 billion in Bitcoin-to-ETF conversions.
The world’s largest asset manager completed these conversions through its iShares Bitcoin Trust (IBIT), which recently surpassed $100 billion in assets under management.
According to Mitchnick, large investors are realizing they can maintain Bitcoin exposure through their existing financial advisors.
He suggested conversions will increase significantly as regulatory clarity improves.
However, Mitchnick declined to comment on the exact number of conversions BlackRock has facilitated through its IBIT ETF so far.
He also noted a recent surge in client inquiries, with some investors seeking to convert only 20% of their Bitcoin holdings while others are moving all their BTC to ETFs.
Bitwise and Galaxy Confirm Strong Interest in Bitcoin-to-ETF Conversions
Beyond BlackRock, asset manager Bitwise confirmed receiving daily inquiries from wealthy clients about conversions.
Similarly, Galaxy has helped some clients process Bitcoin-to-ETF conversions.
Despite converting BTC to Bitcoin ETF shares, investors maintain their underlying exposure to the cryptocurrency.
With shares stored in brokerage accounts, investors can use them as collateral or include them in estate plans
– features that are more complicated with self-custodied Bitcoin.
Interest in Bitcoin ETFs remains strong, with these products collectively recording $61.46 billion in inflows in less than two years.
BlackRock’s IBIT ETF leads with approximately $64.88 billion in inflows and $88.92 billion in AUM as of October 20.
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