Bitcoin holders no longer need $25 million to swap coins into the BlackRock Bitcoin ETF. The minimum just fell to $1 million, opening a direct route into iShares Bitcoin Trust (IBIT) without selling first.
Robbie Mitchnick, BlackRock’s head of digital assets, revealed the cut on Bloomberg’s ETF IQ show on August 10. He said the firm wants to push the bar even lower over time.
A Lower Bar for the BlackRock Bitcoin ETF
Bloomberg ETF analyst Eric Balchunas flagged the change after the broadcast. Until now, the door stood open only to the very largest holders.
The swap runs through authorized participants, the big trading firms that create and redeem ETF shares. A holder hands over Bitcoin and receives IBIT shares in return. No sale takes place. The route also works in reverse.
The option itself is young. Spot Bitcoin ETFs launched in January 2024 on a cash-only model. The SEC only permitted in-kind swaps for crypto ETFs in July 2025. BlackRock’s cut now pushes that plumbing far down-market.
The timing is striking. US spot Bitcoin ETFs drew more than $850 million last week, their best week since April, according to SoSoValue. The funds now hold about $78 billion in bitcoin.
Fear did some of the pushing. Hackers drained roughly $116 million in Bitcoin from over 5,200 Coldcard hardware wallets, per a TRM Labs analysis. The exploit shook faith in self-custody.
Flows stay choppy, though. The funds shed $145 million on August 10 alone. Still, renewed BlackRock client demand suggests the appetite runs deeper than one red day.
Swap Now, Pay Taxes Later
The bigger prize sits in the tax code. IBIT runs as a grantor trust. In plain terms, the IRS treats shareholders as still owning the Bitcoin inside the fund.
That detail changes the math. Selling Bitcoin for cash triggers capital gains. Swapping it into IBIT may not. Clinton Donnelly, the crypto tax specialist behind the CryptoTaxFixer account, spelled out the position in a post.
“Not 100%, but the current tax position is that an in-kind contribution of Bitcoin to IBIT is non-taxable, with your basis and holding period carrying over. The caveat is that this relies on IBIT’s grantor trust treatment, and the IRS has not formally ruled on it.”
Balchunas backed that reading. The tax bill is delayed, not erased, because the original cost basis carries over.
Stock and bond funds cannot copy the move. Most run as open-end funds, not grantor trusts.
Bitcoin (BTC) traded near $63,602 on Tuesday, down 1.2% in a day. If the bar keeps falling, upcoming flow reports may show how much cold-storage bitcoin moves into the wrapper.