Institution Aims to Reduce Bitcoin Whale Migration to ETF Cost, BlackRock Reportedly to Lower IBIT Physical Conversion Threshold to $1 Million

BlockBeats News, August 26th, BlackRock has significantly lowered the minimum threshold for investors to directly redeem their spot Bitcoin ETF IBIT shares in Bitcoin from the previous $25 million to $1 million. This mechanism uses an "in-kind creation" model, allowing investors to directly exchange BTC for ETF shares, without the need to sell Bitcoin first and then buy the ETF, thus avoiding some trading links and potential tax costs.

Reports indicate that Bitwise has also reduced the associated conversion threshold from $100 million to $3 million.

As of now, the total value of physical conversions processed by IBIT has exceeded $5 billion, higher than the $3 billion in October last year. With continued concerns about cryptocurrency theft, hacker attacks, and custody risks, more and more large BTC holders are considering converting some of their self-custodied assets into regulated ETF products.