BlackRock's head of digital assets, Robbie Mitchnick, stated that large bitcoin holders are swapping their coins for shares of the company's iShares Bitcoin Trust (IBIT) at a record pace. This trend is driven by security concerns, including kidnappings and hacks, with $3.6 billion in swaps reported. The trades are in-kind conversions, where a holder delivers bitcoin to the fund through an intermediary and receives newly created IBIT shares.
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The minimum size for these swaps has decreased from around $30 million to between $1 million and $2 million. Taxes are also a consideration, as converting appreciated bitcoin into IBIT in kind may not trigger capital-gains taxes. The fund's custodian, an affiliate of Coinbase Prime, holds the coins in an institutional-grade cold-storage model.