Bitcoin Whales Move Holdings to Wall Street via BlackRock ETF
Major Bitcoin investors are shifting their assets from on-chain wallets to traditional finance. They use exchange-traded funds (ETFs) from firms like BlackRock. This allows them to keep their Bitcoin exposure without selling their coins, Bloomberg reported on Tuesday.
This trend shows growing links between digital assets and traditional finance. BlackRock’s head of digital assets, Robbie Mitchnick, said the firm has helped convert over $3 billion into its iShares spot Bitcoin ETF (IBIT), according to Bloomberg.
Benefits of Using Bitcoin ETFs for Large Investors
Many large Bitcoin holders now prefer regulated investment options. These ETFs offer more security and oversight. Mitchnick said investors like the ease of holding Bitcoin exposure through their financial advisers or private banks.
Investor interest varies. Some want to move about 20% of their Bitcoin into ETFs. Others aim to shift all their holdings to traditional finance. By exchanging Bitcoin for ETF shares, investors can:
- Keep Bitcoin exposure within brokerage accounts
- Use shares as collateral or for loans
- Include holdings in estate planning
SEC Rule Change Boosts Bitcoin ETF Popularity
The US Securities & Exchange Commission (SEC) updated rules to allow in-kind creations and redemptions for crypto ETFs. This means authorized participants can swap ETF shares directly for Bitcoin instead of cash. The change improves transaction efficiency and offers tax benefits for institutions.
Bitwise President Teddy Fusaro said, “If you bring your $5 million worth of Bitcoin into a Bitcoin ETF, and you now hold that on your wealth management platform, you qualify for a much higher level of service.”
BlackRock’s iShares Bitcoin ETF (IBIT) is now its most profitable fund. It generates $245 million in annual revenue. The fund is close to reaching $100 billion in assets under management after just over 400 days of trading.
Bitcoin trades near $108,500 in the Asian session on Wednesday, up 0.2% in the last 24 hours at the time of publication.
