BlackRock cuts bitcoin ETF swap minimum to $1 million: Report
BlackRock and Bitwise have significantly lowered the minimum capital requirements for investors to swap Bitcoin directly into ETF shares. This trend is driven by investor concerns regarding custody security and potential hacks.
Why it matters
Lowering barriers to entry for in-kind ETF creation facilitates easier institutional and high-net-worth access to regulated Bitcoin products.
The minimum value of bitcoin needed to swap directly into IBIT shares slipped to $1 million in July. It used to be $25 million, the report said, adding that ETF issuer Bitwise has also cut its threshold to $3 million from $100 million.
The swapping works through a process called “in-kind creation,” where investors hand over their BTC to the fund and get ETF shares back. This way they don’t need to sell their BTC and then buy ETF shares, which attracts capital gains tax.
Such transactions are already booming. IBIT alone has processed more than $5 billion of these swaps, up from $3 billion back in October, according to Robbie Mitchnick, BlackRock's head of digital assets.
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