Bitcoin Whales Shift $3B to BlackRock ETF, Ending 15-Year Custody Era

TLDR

• Bitcoin whales have moved over $3 billion into BlackRock’s iShares spot Bitcoin ETF.
• This marks the first significant decline in self-custodied Bitcoin holdings in 15 years.
• BlackRock confirmed that large holders now prefer traditional financial institutions for crypto exposure.
• A recent SEC rule change allows in-kind redemptions and creations for crypto ETFs.
• This regulatory shift makes ETF conversions more efficient and tax-friendly for institutional investors.

Bitcoin whales have transferred over $3 billion into BlackRock’s iShares Bitcoin ETF, marking a major custody shift. BlackRock confirmed this move amid the first decline in self-custodied Bitcoin since its inception. The shift shows a strong preference for institutional custody and regulated investment structures.

Bitcoin Whales Favor Regulated Investment Platforms

Bitcoin whales are transferring their holdings to regulated platforms for enhanced financial access and improved portfolio management options. Robbie Mitchnick, BlackRock’s Head of Digital Assets, confirmed over $3 billion in Bitcoin has been converted into the ETF.

He explained that many Bitcoin whales now choose traditional firms over complex self-custody systems. This shift enables smoother integration with broader investment services already used by institutions. More whales are aligning their crypto exposure with regulated asset management options.

Moreover, BlackRock’s ETF is attracting whales by offering security and streamlined conversion methods. Bitcoin whales are now utilizing regulated channels to optimize their holdings and streamline their financial operations. They continue to migrate from direct custody towards ETFs with institutional-grade backing.

SEC Rule Change Encourages ETF Participation

The U.S. SEC recently allowed in-kind redemptions and creations for crypto ETFs, benefiting large institutional investors. This rule lets authorized participants exchange Bitcoin directly for ETF shares without using cash. Bitcoin whales now find this process efficient and potentially more tax-effective.

Mitchnick attributed the growing ETF inflow to this regulatory change that supports large asset transfers. This change allows seamless movement between ETFs and Bitcoin for qualified participants. As a result, Bitcoin whales can now manage crypto exposure more flexibly within regulated frameworks.

Furthermore, analyst Willy Woo observed that Bitcoin whales are showing apparent behavior shifts. He noted a steady decrease in self-custodied Bitcoin as ETFs gain momentum. Institutions are reshaping how early holders interact with Bitcoin markets.

Global Bitcoin ETF Launches Expand Access

Costa Rica’s Banco Nacional is introducing its first spot Bitcoin ETF, providing domestic investors with regulated access to crypto. The product, priced in USD with a minimum of $100, broadens local exposure to digital assets. Bitcoin whales in the region may now enter regulated markets with more confidence.

In Australia, the ASX launched the VanEck Bitcoin ETF that tracks its U.S. counterpart. This development marks growing demand for structured crypto investments. It reflects a continued global push to legitimize Bitcoin exposure through traditional financial systems.

The UK’s Financial Conduct Authority approved two WisdomTree Bitcoin ETPs on the London Stock Exchange. 21Shares is also preparing a similar launch following recent approvals.

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