BlackRock has reduced the minimum size for in-kind conversions in its iShares Bitcoin Trust, or IBIT, from $25 million to $1 million. Robbie Mitchnick, the firm’s head of digital assets, disclosed the change in an appearance on Bloomberg TV.
The move sharply lowers the threshold for exchanging bitcoin directly for IBIT shares, expanding access to a mechanism that had previously been practical mainly for the largest market makers and institutional trading desks.
A much lower entry point for in-kind exchanges
The new minimum represents a 96% reduction from the prior $25 million level. Under the in-kind process, an authorized participant delivers bitcoin and receives ETF shares instead of using cash to complete the transaction.
Authorized participants are generally large banks or trading firms that are permitted to create and redeem ETF shares directly with the issuer. By lowering the threshold, BlackRock is opening that channel to a wider range of authorized participants and mid-sized institutions.
Why the change matters for IBIT trading
A broader set of firms able to transact directly in bitcoin and IBIT shares could make the fund more efficient. More participants arbitraging between the ETF and the underlying asset tends to help the fund track the spot price of bitcoin more closely over time.
The same process can also support better market liquidity and narrower bid-ask spreads. The source article also noted a potential tax benefit for institutions that already hold bitcoin, because an in-kind conversion into ETF shares may avoid a taxable cash sale.
Part of a wider shift in the ETF market
Regulators approved BlackRock and other issuers to use this mechanism on spot bitcoin ETFs earlier in 2026, and BlackRock has been widening access to it since then. At the earlier $25 million level, the feature was effectively limited to the largest trading firms.
The latest change comes as IBIT continues to post strong inflows, with the source article describing hundreds of millions entering the fund in a short period amid a broader run of inflows across spot bitcoin ETFs. It also said a cheaper and more liquid in-kind process may strengthen BlackRock’s competitive position as investors move between products.
What comes next
According to the source article, BlackRock hopes to reduce the minimum further and eventually make in-kind conversion available at any transaction size. That would mark another step in broadening access to the creation and redemption process.
Since launching in January 2024, IBIT has become the largest spot bitcoin ETF by assets and a central product in BlackRock’s digital-asset strategy. The next confirmed development to watch is whether the company follows through with additional cuts to the minimum as the market for spot bitcoin ETFs continues to mature.
Source: news.bitcoin.com