TLDR
- BlackRock’s Bitcoin ETF has processed more than $5 billion in tax-deferred swaps from direct Bitcoin holdings.
- The total jumped sharply from $3 billion recorded last October.
- BlackRock lowered its minimum for private in-kind conversions from $25 million to $1 million in July.
- Bitcoin traded near $79,000, down over 2% in 24 hours ahead of US inflation data.
- Spot Bitcoin ETFs saw $314.3 million in inflows on Tuesday, led by BlackRock’s fund.
BlackRock’s spot Bitcoin ETF has processed more than $5 billion in conversions from direct Bitcoin holdings into ETF shares. The data comes from Bloomberg ETF analyst Eric Balchunas.
This swap process lets large Bitcoin holders move their coins into the ETF without triggering a taxable sale. The holders keep their exposure to Bitcoin while shifting into a more traditional investment structure.
The $5 billion figure marks a jump from the $3 billion recorded in October last year. The pace of conversions has picked up in recent months.
Lower Minimums Open the Door
BlackRock cut the minimum for private in-kind creations on its Bitcoin ETF in July. The threshold dropped from $25 million to $1 million.
The lower minimum allowed more investors to take part in these tax-deferred swaps. Wealthy holders no longer need tens of millions of dollars to qualify.
Robbie Mitchnick, head of digital assets at BlackRock, said the trend will keep growing as access expands. He said outside events such as custody failures push people to make the switch.
Other firms have seen similar activity. Bitwise’s Bitcoin ETF recorded a similar swap trend, according to Bloomberg’s analysis.
Morgan Stanley’s Bitcoin ETF attracted between 5% and 7% of its total assets under management through these swaps. That share makes up a large part of the fund’s holdings.
Bitcoin Price Slips Ahead of Inflation Data
Bitcoin’s price fell more than 2% in the past 24 hours. The drop came ahead of the release of US inflation data known as the PCE index.
The coin traded near $79,000 at the time of writing. The 24 hour low was $77,954 and the high was $80,838.
Trading volume dropped nearly 40% over the same period. Lower volume points to less activity among short term traders.
Federal Reserve official Susan Collins said she would support a rate hike if inflation stays high. Her comment added to caution in the market.
Despite the price dip, spot Bitcoin ETFs saw $314.3 million in inflows on Tuesday. BlackRock’s fund led the group with $284.4 million.
Fidelity, Bitwise, the Grayscale mini Bitcoin fund, and Morgan Stanley’s fund also recorded inflows that day. The inflows show demand for ETF exposure stayed steady even as the price fell.
A recovery above $80,000 could help Bitcoin move toward $82,000 and then $85,000. A drop below support near $81,000 could send the price back to $75,000.
Data from CoinGlass showed heavy profit taking in the derivatives market. Total Bitcoin futures open interest fell 4.7% to $55.69 billion in the last 24 hours.
Open interest on CME dropped nearly 6%, while Binance saw a drop of about 3%. The declines suggest traders are cautious ahead of key events this week.
