BlackRock hits $5 billion in tax-deferred Bitcoin-to-ETF swaps, indicating whales have moved significant BTC holdings to IBIT over the past few months. The Wall Street giant recently lowered the minimum limit for in-kind conversions to $1 million.
BlackRock Hits $5 Billion in Bitcoin-to-ETF swaps
BlackRock’s spot Bitcoin ETF (IBIT) has processed more than $5 billion in conversions from direct Bitcoin holdings to ETF shares, according to a Bloomberg ETF analyst Eric Balchunas.
This marks a sharp increase from the $3 billion recorded in October last year. BlackRock cut the minimum for private in-kind creations on its Bitcoin ETF from $25 million to $1 million in July this year, allowing more investors to do tax-deferred swaps.
Whales swap large crypto holdings for ETF shares, allowing them to retain exposure to Bitcoin while moving their wealth from private wallets and crypto platforms into mainstream finance. BlackRock aims to generate $500 million in annual digital asset revenue by 2030.
“It’s going to keep growing because we keep expanding the access,” said Robbie Mitchnick, head of digital assets at BlackRock. “People see things happen in the outside world – whether it’s kidnappings, ransom, custody failures – that motivate them to make this switch for all or some of their holdings.”
Bloomberg’s analysis highlighted that Bitwise’s BITB recorded a similar trend. Notably, Morgan Stanley’s MSBT attracted almost 5% to 7% of its total assets under management through Bitcoin-to-ETF swaps.
BTC Price Rally Amid Massive IBIT Inflows
BTC price dropped more than 2% in the past 24 hours ahead of US PCE inflation data release, with the price currently trading near $79,000. The 24-hour low and high are $77,954 and $80,838, respectively.
Furthermore, trading volume has decreased by almost 40% in the last 24 hours, indicating a decline in interest among traders as Fed’s Susan Collins plans to support a rate hike if higher inflation persists.
Spot Bitcoin ETFs saw $314.3 million in inflows on Tuesday, with BlackRock Bitcoin ETF (IBIT) leading with $284.4 million in inflows. Fidelity’s FBTC, Bitwise’s BITB, Grayscale mini Bitcoin ETF, and Morgan Stanley’s MSBT also recorded inflows.
As per a Bitcoin price prediction, stable recovery above $80,000 may help it take another step toward $82,000 before attempting to break the $85,000 mark. However, rejection from resistance at $81,000 and profit booking could trigger a drop to $75,000.
CoinGlass data showed massive profit booking in the derivatives market. The total BTC futures open interest dropped 4.7% to $55.69 billion in the last 24 hours. BTC futures OI on CME and Binance dropped nearly 6% and 3%, respectively. This signals cautious sentiment among derivatives traders before key events this week.
Traders looking to hedge their spot positions during these market fluctuations can check out our list of the best crypto futures trading platforms to compare fee structures and leverage options.