BlackRock Cuts IBIT's In-Kind Bitcoin Conversion Minimum to $1 Million

BlackRock has lowered the minimum size required to convert spot bitcoin into shares of its iShares Bitcoin Trust (IBIT) from $25 million to $1 million, CoinDesk reported, citing Bloomberg and comments from Robbie Mitchnick, BlackRock's Head of Digital Assets. The change was implemented in July and is designed to broaden access for more institutions and high-net-worth investors. The new threshold applies to in-kind conversions—the process of moving spot Bitcoin holdings into ETF shares—and does not affect how retail investors buy or sell IBIT through brokerage accounts on the secondary market. Mitchnick said IBIT has processed more than $5 billion in bitcoin conversion transactions in total. The report noted the figure was around $3 billion in October of last year, pointing to sustained growth in demand. Bitwise has made a similar move, cutting its own conversion minimum from $100 million to $3 million, according to the report. Together, the changes underscore a push to lower operational hurdles for large holders looking to enter the ETF wrapper. Conversions have become more flexible since in-kind creation and redemption was opened up for spot crypto ETFs. The U.S. Securities and Exchange Commission approved physical subscription and redemption in July 2025; earlier approvals largely relied on cash-based processes. Under the in-kind model, authorized participants can create and redeem ETF shares directly. Most bitcoin holders still typically need to work through a broker, trading desk, or other qualified intermediary, since they cannot directly create IBIT basket shares. The report added that tax treatment remains a key consideration, with no single outcome applying across all conversions. Tax consequences depend on the investor's status, the intermediary used, the relevant jurisdiction, and the legal structure of the transaction. The SEC's approval of in-kind redemptions focused on operational efficiency rather than creating any special tax treatment, and regulators said the approach could help reduce costs for issuers, authorized participants, and shareholders. Mitchnick also pointed to heightened concern about self-custody risks following crypto-related security incidents, including hacks and kidnappings, which has led some holders to consider moving part or all of their bitcoin into regulated products. While lower thresholds may widen adoption among large holders, the pace of uptake will still hinge on intermediary access, transaction costs, tax outcomes, and investors' assessment of direct ownership versus regulated exposure.