BlackRock Enables $5B in Tax-Deferred Bitcoin-to-ETF Swaps as IBIT Sees Record Inflows

BlackRock's iShares Bitcoin Trust (IBIT), the largest spot Bitcoin (BTC) exchange-traded fund (ETF), drew its strongest year-to-date weekly net inflow last week, with $1.33 billion in new cash. Alongside the inflows, IBIT has facilitated $5 billion in tax-deferred Bitcoin-to-ETF swaps through in-kind creations and redemptions since receiving U.S. Securities and Exchange Commission (SEC) approval on July 29, 2025. Bloomberg reported that cumulative in-kind conversions reached $5 billion as of August 26, up from $3 billion in October 2025. BlackRock lowered the minimum size for in-kind transactions last month, cutting the threshold from $25 million to $1 million. Robbie Mitchnick, BlackRock's head of digital assets, said demand has also been driven by heightened security concerns. "It's going to keep growing because we keep expanding the access. People see things happen in the outside world – whether it's kidnappings, ransom, custody failures – that motivate them to make this switch for all or some of their holdings," Mitchnick said. Bitwise also moves to broaden access As IBIT reached $5 billion in in-kind activity, Bitwise Bitcoin ETF (BITB) has likewise reduced its minimum deal size. Bitwise's first in-kind transaction required at least $100 million, later falling to $50 million, and now stands at $3 million. "The whole process is still bespoke, from introducing a client to a market maker to working with the adviser, but it's becoming more standardized," said Matt Hougan, Bitwise's chief investment officer. He added that the shift has helped accelerate Bitcoin's adoption as an institutional asset. Bitcoin market update With U.S. spot Bitcoin ETFs continuing to broaden mainstream access, BTC sentiment has turned more bullish. Bitcoin surged 22% over the past seven days and is up 19.29% over the last six months, changing hands at $78,600 at the time of writing. Over the past 24 hours, Bitcoin trading volume fell 46.32% to about $33.71 billion. Featured image via Shutterstock.