- BlackRock’s iShares Bitcoin ETF (IBIT) has received over $3 billion in Bitcoin from long-term whale holders.
- Recent SEC rule changes allowing in-kind redemptions are fueling conversions from self-custody to ETFs.
- Bitcoin self-custody trends are weakening as institutional adoption and custodial products gain traction.
Bitcoin whales are increasingly transferring their coins into exchange-traded funds (ETFs), marking a major transition in how digital wealth is managed.
In an interview with Bloomberg, Robbie Mitchnick, head of digital assets at BlackRock, revealed that more than $3 billion worth of Bitcoin has been converted into the firm’s iShares spot Bitcoin ETF (IBIT).
After years of storing their assets in self-custody wallets, many early Bitcoin adopters are now opting for the convenience and security of regulated financial products, Mitchnick said. This shift allows them to retain exposure to Bitcoin while integrating their portfolios with private banking and advisory services enabling easier access to credit and broader investment opportunities.
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This change reflects a growing comfort among large holders with institutional-grade custody.
SEC reforms drive institutional conversions
Mitchnick attributed part of this migration to a recent rule change by the U.S. Securities and Exchange Commission (SEC), which now permits in-kind creations and redemptions for crypto ETFs.
The update allows authorized participants to swap ETF shares directly for Bitcoin, rather than cash, making the conversion process more tax-efficient and operationally streamlined for institutions managing substantial positions.
The regulatory shift has accelerated demand for BlackRock’s IBIT, which has quickly emerged as the most successful of all approved U.S. spot Bitcoin ETFs. In June, IBIT became the fastest ETF in history to surpass $70 billion in assets under management, a figure that has since surged past $88 billion, according to Bitbo data.
From “not your keys” to custodial trust
The migration of whales into ETFs underscores a significant evolution in Bitcoin’s ethos. For over a decade, early adopters championed self-custody summed up in the phrase “not your keys, not your coins” as a safeguard against third-party risk.
However, the emergence of spot Bitcoin ETFs, corporate treasuries, and institutional custody services is gradually reshaping ownership norms.
While ETFs and self-custody cater to distinct investor types, analyst Willy Woo observed in July that ETF growth may be drawing demand away from personal wallets. On-chain metrics, he said, show that the supply of self-custodied Bitcoin has broken a 15-year uptrend, signaling a behavioral turning point.
Still, for many early whales, the move toward ETFs represents a strategic trade-off prioritizing accessibility, liquidity, and regulatory clarity over ideological purity.
As institutional adoption deepens, the Bitcoin market is evolving from a niche experiment in financial sovereignty into an integrated component of the global investment.
