BlackRock has reduced the minimum transaction size for eligible Bitcoin holders using in-kind creations for its iShares Bitcoin Trust ETF (IBIT) from $25 million to $1 million, as reported by Bloomberg.
The change, made in July 2026, represents a 96 per cent reduction in the minimum threshold. The change does not affect ordinary investors buying or selling IBIT shares through a brokerage account.
The lower requirement allows a wider range of eligible institutional and professional investors to contribute Bitcoin directly to the ETF and receive IBIT shares in return.
The primary modification was simple: the IBIT in-kind creation minimum transaction size was reduced from $25 million to $1 million. An eligible Bitcoin holder can use this structure to move Bitcoin into the ETF development process and obtain shares that provide them exposure to the underlying asset.
The investor can trade direct Bitcoin holdings for ETF exposure rather than selling Bitcoin for cash, waiting for settlement, and then purchasing IBIT shares. Long-term Bitcoin holders with significant unrealised gains may find this especially pertinent.
The previous $25 million minimum limited the process to a relatively small group of very large holders. Lowering the threshold to $1 million makes it available to a broader group of professional investors.
One effect of the lower minimum is that it becomes easier to move between direct Bitcoin ownership and ETF ownership. Historically, investors looking to shift from self-custody to an exchange-traded product generally had to sell Bitcoin and then purchase ETF shares. That extra step can have tax, execution, and market-impact implications depending on the investor’s situation.
With an in-kind transaction, Bitcoin itself is delivered into the ETF creation process, which can simplify the transition for investors with large holdings. Rather than deciding only whether to sell Bitcoin, investors can choose whether to hold Bitcoin directly or to own a regulated security that tracks Bitcoin exposure. By lowering the threshold, that choice becomes relevant to a larger group of investors.
A transaction in which the underlying asset is traded for freshly issued ETF shares is known as an in-kind creation. Authorised participants, specialist financial firms that collaborate with the fund and assist in maintaining the ETF’s market price in line with the value of its underlying assets, manage the process. When purchasing IBIT shares, individual investors usually do not send Bitcoin straight to BlackRock.
An authorised participant, broker, trading desk, or other middleman is typically used by a qualifying Bitcoin holder. The ETF receives the asset after Bitcoin is transferred through the necessary procedure, and the investor receives shares that represent comparable exposure.
This system enables ETF markets to process large volumes of capital through a standardised framework that links underlying assets to exchange-traded securities.
The regulatory clarification regarding these operations came in July 2025 when the US Securities and Exchange Commission approved the application giving permission to the active participants to engage in in-kind creation and redemption of crypto-based exchange-traded funds.
Before the change, spot Bitcoin and Ether ETPs were limited to cash-based creations and redemptions. The SEC said the new framework could reduce costs and improve efficiency. SEC officials also said it aligned crypto products more closely with the processes used by other commodity-based exchange-traded products.
Robbie Mitchnick, BlackRock’s head of digital assets, told Bloomberg that IBIT had processed more than $5 billion through these transactions. Reports also showed the cumulative total was about $3 billion in October of the previous year, indicating that billions of dollars’ worth of Bitcoin have already moved through the process.
BlackRock is not the only asset manager reducing minimum requirements for in-kind Bitcoin creations. Bloomberg reported that Bitwise lowered its minimum transaction size from $100 million to $3 million, a larger percentage reduction than BlackRock’s move. The change suggests asset managers are competing not only on fees but also on the institutional services available to large Bitcoin holders.
A $100 million minimum limited access to a small group of very large investors. A $3 million threshold expands eligibility to a broader market. BlackRock’s $1 million minimum lowers the bar further.
Self-custody has long been based on the straightforward idea that you control Bitcoin if you control the private keys. That strategy is still crucial, but it also calls for constant accountability. Wallet security, backups, inheritance planning, operational access, key management, and physical security must all be handled by large holders. Concerns about the hazards that cryptocurrency owners face have grown along with the value of Bitcoin holdings.
Mitchnick said some investors have reconsidered self-custody after reports of hacks, kidnappings, and other attacks targeting crypto holders.
For those investors, moving into IBIT may be less about giving up Bitcoin exposure and more about shifting some of the operational responsibilities involved in holding Bitcoin directly.
A significant feature of the in-kind swaps is that the investors can possibly be granted an ETF exposure without converting Bitcoin into cash first. Though, not all Bitcoin conversions to IBIT are free from tax liabilities. The tax implications depend on various factors like how the investor interprets crypto trades, transaction structure, parties involved, and various tax laws from the respective countries.
In July 2025, the SEC advanced a ruling in relation to the technical side and productivity of the crypto ETP issue process. However, it did not grant a general exemption from the tax liability with respect to Bitcoin transfers into ETF.
