BlackRock on August 10 cut the minimum for in-kind bitcoin swaps into its iShares Bitcoin Trust (IBIT) from $25 million to $1 million, letting holders convert BTC directly into ETF shares without selling. The change, enabled by the SEC’s July 2025 permission for in-kind crypto ETF creations, may defer capital gains under IBIT’s grantor trust treatment because basis and holding period carry over, though the IRS has not formally ruled. The move should boost ETF adoption and flows (about $850 million last week and roughly $78 billion held) but comes amid custody security concerns after a roughly $116 million Coldcard hack and ongoing flow volatility, creating a mix of adoption upside and risk for crypto markets.

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In Brief

BlackRock cut IBIT's bitcoin swap minimum from $25 million to $1 million.
Holders can trade BTC directly for ETF shares without selling their coins first.
The swap may defer capital gains taxes, though the IRS hasn't formally ruled.

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.

Interesting: Robbie Mitchnick said on show just now that bitcoiners can do in-kind exchanges of btc for IBIT for $1mil minimum now. It used to be $25mil. https://t.co/uGA74JG2Mv
— Eric Balchunas (@EricBalchunas) August 10, 2026

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.

Bitcoin ETF Flows. Source: SoSoValue

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.

Good extra info on the "in-kind conversions" of bitcoin for ETF shares. Yes, you don't realize gains but you do carry your basis, so it's merely deferral, not dodge. And yes, it works the other way: ETF for btc. And yes, it is something that works w Grantor Trust, not open end… https://t.co/EFBcrlFjKd
— Eric Balchunas (@EricBalchunas) August 11, 2026

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.

Read the article at BeInCrypto