BlackRock has lowered the minimum threshold for converting Bitcoin into spot ETF IBIT shares from $25 million to $1 million. According to Bloomberg, citing Robbie Mitchnick, BlackRock’s Head of Digital Assets, this adjustment was implemented in July, enabling more high-net-worth clients and institutions to access this conversion service.
This change does not affect ordinary investors' ability to buy and sell IBIT through their brokerage accounts. The adjusted threshold applies to the process of converting spot Bitcoin assets into ETF shares, not to the minimum amount required to purchase ETFs on the secondary market.
IBIT has completed over $5 billion in conversions cumulatively.
Mitchnick stated that the volume of Bitcoin conversion transactions processed by IBIT has exceeded $5 billion. The report noted that this figure was around $3 billion in October last year, indicating continued growth in demand.
Bitwise has made similar adjustments. According to the report, the asset manager has lowered the minimum threshold for conversion from $100 million to $3 million. Both institutions' moves point to the same trend: reducing the operational barriers for large holders to enter the ETF structure.
- BlackRock threshold: reduced from $25 million to $1 million
- Bitwise threshold: reduced from $100 million to $3 million
- IBIT cumulative conversion volume: over $5 billion
After the opening of physical subscription and redemption, conversions become more flexible.
The U.S. Securities and Exchange Commission (SEC) approved physical subscription and redemption for spot crypto ETFs in July 2025. Earlier approvals required funds to primarily use cash processes.
Under this mechanism, authorized participants can directly complete the creation and redemption of ETF shares. However, for most Bitcoin holders, conversion typically still requires arranging through a broker, trading desk, or other qualified intermediary, as ordinary holders cannot directly create IBIT basket shares.
Therefore, lowering the threshold means extending services that were previously available only to ultra-large clients to a broader range of institutions and affluent investors, without altering the fundamental trading rules of ETFs.
Taxation and custody remain key factors.
The report also notes that there is no uniform conclusion regarding the tax implications of converting bitcoin into ETF shares. The specific treatment depends on the investor’s status, the intermediary involved, the applicable jurisdiction, and the legal structure of the transaction.
At the time, the SEC approved physical redemptions with the focus on improving the fund's operational efficiency, not on establishing special tax treatment for investors. Regulators believed that this approach helps reduce costs for issuers, authorized participants, and shareholders.
Mitchnick also noted that some holders, after witnessing security incidents related to crypto assets—such as hacks and kidnappings—have begun reassessing the risks of self-custody and are considering moving part or all of their holdings into regulated products.
Overall, lower barriers may encourage more large holders to consider transferring their Bitcoin into an ETF structure, but actual adoption will still depend on the availability of intermediaries, transaction costs, tax treatment, and investors’ assessments of the trade-offs between holding Bitcoin directly versus investing in regulated products.