BlackRock has just slashed the minimum in-kind conversion size for its iShares Bitcoin Trust, bringing it down from $25 million to $1 million. That’s a 96% reduction and signals a plumbing change in ETF mechanics, not a retail story. In-kind creation and redemption let authorized market participants directly deliver or take Bitcoin from the ETF, bypassing the need to transact entirely in cash. Until now, only firms able to put up at least $25 million at a time could take advantage of that route. Lowering the barrier to $1 million potentially opens IBIT’s in-kind swaps to a wider group of institutions previously shut out by that minimum.
The practical effect is that this move can deepen liquidity and help keep the ETF’s market price closer to spot Bitcoin by allowing more players to smooth imbalances between fund shares and the underlying asset. BlackRock’s cut came alongside a clear shift in flows: IBIT absorbed $479 million out of a $626 million, 3-day inflow into all U.S. spot Bitcoin ETFs. That’s about 76% of the market’s new money in that window, an immediate advantage in attracting capital. The watchpoint now is whether other ETF providers follow suit, and if a larger mix of authorized participants starts running in-kind trades more actively.