BlackRock Cuts IBIT In-Kind Creation Minimum to $1 Million From $25 Million

BlackRock, the world’s largest asset manager, has sharply lowered the minimum amount required to convert Bitcoin into shares of its exchange-traded fund.

Bloomberg reported on August 25 that BlackRock last month cut the minimum transaction size for in-kind creations into its spot Bitcoin ETF, IBIT, to $1 million from $25 million.

In-kind creation allows investors to transfer Bitcoin to the asset manager without selling it and receive ETF shares in return. Investors no longer hold Bitcoin directly, but can still gain exposure to price movements through the ETF. It also reduces the burden of self-custody, including managing private keys and digital wallets.

Demand for in-kind creation is rising as kidnappings, hacks and other incidents targeting crypto investors continue. Robbie Mitchnick, BlackRock’s head of digital assets, said investors who have seen cases involving kidnapping, extortion and custody failures are trying to move all or part of their holdings into ETFs.

Cumulative in-kind creations through BlackRock’s IBIT have already exceeded $5 billion. That is more than $2 billion higher than in October last year, when the total stood at $3 billion.

Other asset managers are lowering the threshold as well. Bitwise initially required a minimum transaction size of $100 million for its first in-kind creation, but later reduced that floor in stages to $3 million.