Wall Street is making it easier for bitcoin whales to ditch self-custody: report

Major asset managers are significantly lowering barriers for large cryptocurrency holders to transfer assets from self-custody into regulated exchange-traded funds. BlackRock has reduced the minimum bitcoin requirement for direct in-kind swaps into its iShares Bitcoin Trust (IBIT) to $1 million, down from the previous $25 million threshold. Similarly, competitor Bitwise has slashed its minimum threshold from $100 million to $3 million, making it markedly more accessible for crypto whales to transition holdings into traditional financial infrastructure. Through in-kind creation, investors can directly exchange their spot bitcoin for ETF shares without selling the underlying asset on the open market, avoiding immediate capital gains taxes. According to BlackRock, IBIT has processed over $5 billion in such swaps, up from $3 billion recorded in October. The accelerating migration is largely driven by institutional and high-net-worth security concerns, including threats of hacks, extortion, and self-custody operational risks, further consolidating spot bitcoin supply into institutional custody frameworks.