Blackrock Cuts IBIT Bitcoin Conversion Minimum From $25M to $1M

Mitchnick Confirms the Change

Robbie Mitchnick, Blackrock’s head of digital assets, disclosed the change during a Bloomberg Television appearance yesterday, stating:

“Bitcoiners can do in-kind exchanges of BTC for IBIT for $1 million minimum now. It used to be $25 million.”

In-kind conversion lets an authorized participant hand over actual bitcoin and receive IBIT shares in return, rather than settling the transaction in cash. An authorized participant is typically a large bank or trading firm licensed to create and redeem exchange-traded fund (ETF) shares directly with the issuer.

Regulators cleared Blackrock and other issuers to offer this mechanism on their spot bitcoin ETFs earlier in 2026, and the iShares Bitcoin Trust has steadily expanded who can use it since.

Why the Minimum Mattered

At $25 million, in-kind conversion was effectively reserved for large market makers and institutional trading desks capable of moving that much bitcoin at once. Dropping the threshold to $1 million brings a far broader set of authorized participants and mid-sized institutions into the mechanism.

The practical effect is a tighter link between IBIT’s share price and the underlying spot price of bitcoin. When more participants can arbitrage the fund directly against the asset it holds, pricing discrepancies get corrected faster, which should benefit ordinary IBIT shareholders through better secondary-market liquidity and narrower bid-ask spreads over time.

There is also a tax angle, i.e. converting bitcoin directly into IBIT shares in kind can avoid triggering a taxable cash sale for institutions that already hold the asset, a structural advantage cash-settled ETFs cannot offer.

Blackrock has said it intends to keep pushing the threshold down further, with Mitchnick previously stating the firm hopes to eventually make in-kind conversion available “at any transaction size.”

IBIT’s Inflow Streak Continues

The minimum cut lands in the middle of a strong run for Blackrock’s flagship bitcoin product. IBIT captured $479 million across a three-day stretch last week, good for roughly 76% of total spot bitcoin ETF inflows during that window. Spot bitcoin ETFs as a group logged five consecutive days of net inflows in early August as well, pulling in more than $750 million on the week even as bitcoin’s price wobbled below $65,000.

The contrast with Grayscale’s GBTC has been stark as the fund has bled roughly $27.47 billion in cumulative outflows since its 2024 conversion to an ETF wrapper, with investors rotating into lower-fee products like IBIT. A cheaper, more liquid in-kind mechanism gives Blackrock another edge in that competition, since institutions that already hold bitcoin directly can now move into IBIT shares more efficiently without first unwinding their position for cash.

Since its January 2024 launch, IBIT has grown into the largest spot bitcoin ETF by assets, and Blackrock has treated the product as a flagship for the firm’s broader digital-assets push, which now spans an ether ETF and a growing suite of tokenization initiatives.

Looking ahead, the lower minimum is unlikely to be the last change to IBIT’s mechanics as analysts expect Blackrock and rival issuers to keep refining creation and redemption processes as the spot bitcoin ETF market matures and daily trading volumes grow. Pundits have flagged rising in-kind activity as a metric worth tracking, since a growing share of in-kind versus cash creations and redemptions is typically read as a sign of a more efficient, maturing market structure.