BlackRock’s Bitcoin ETF Quietly Absorbs $3B Via In-Kind Conversions
Wall Street's quiet crypto coup unfolds as traditional finance giants master the Bitcoin game.
The In-Kind Conversion Playbook
BlackRock just executed Wall Street's favorite magic trick—moving $3 billion in Bitcoin without triggering market alarms. In-kind conversions let institutions shuffle assets between funds without cash changing hands. No market impact, no price slippage, just pure financial engineering at scale.
Institutional Adoption Accelerates
Traditional finance finally cracked the code. While crypto natives debated decentralization, BlackRock mastered the regulatory dance. Their ETF now functions as a seamless on-ramp for institutional capital—proving sometimes the most revolutionary moves happen within the system, not against it.
The New Bitcoin Liquidity Engine
Forget retail FOMO—this is institutional workflow optimization. The $3 billion transfer represents sophisticated capital deployment, not speculative gambling. Wall Street's playing chess while crypto Twitter plays checkers.
Traditional finance always wins in the end—they just buy the board while everyone's watching the pieces.
BlackRock clients bring Bitcoin into the TradFi system
Robbie Mitchnick, head of digital assets at BlackRock, said the firm has already helped clients convert over $3 billion of their Bitcoin using these in-kind transfers.
He noted that some investors are only moving 20% of their holdings into ETF form, but others are “going 100/zero,” putting all of it into the regulated wrapper. “Consolidate everything in this way, it’s the easiest way for me to hold this going forward,” is how Mitchnick described the full switch.
He also said the firm’s been getting a wide range of inquiries from Bitcoin holders looking to bring their assets into the wealth-management world. It’s no longer just the tech-savvy crowd. Many of these people already have private-bank relationships, and they want everything under one roof. “There’s convenience in being able to hold their exposure within their existing financial adviser or private-bank relationship,” Mitchnick said.
Others in the industry are seeing the same trend. Bitwise Asset Management says it’s now receiving daily inquiries about these ETF conversions. Teddy Fusaro, Bitwise’s president, explained how they completed their first in-kind deal with the BITB ETF back in August. He pointed to one investor with $1 million on a wealth-management platform and $5 million in Bitcoin kept separately.
“Your wealth management platform treats you like you’re a $1 million client,” Fusaro said. “If you bring your $5 million worth of Bitcoin into a Bitcoin ETF, and you now hold that on your wealth management platform, you qualify for a much higher level of service.”
Galaxy, another major player, confirmed it has also handled several conversions. Michael Harvey, the company’s head of franchise trading, said they’ve processed a handful so far and expect more to follow.
Wall Street prepares for wider Bitcoin integration
For now, banks aren’t allowed to handle the full in-kind transaction. Only non-bank broker-dealers can.
But BlackRock confirmed that banks are already helping out in parts of the process, especially when creating new ETF shares. And Mitchnick made it clear that more regulatory clarity WOULD bring in even bigger players. That means more banks, more volume, and more whales moving their Bitcoin into regulated channels.
Wes Gray, CEO of Alpha Architect, which designs ETFs with tax-focused strategies, said: “Life is just easier in TradFi land — we’ve spent a century perfecting integration, access, and security. Bitcoiners are finally realizing that.”
Then Wes added the part no one in crypto really wants to hear out loud: “The great irony, of course, is that Bitcoin was born to escape traditional finance — and now its biggest holders are trying to get back in.”
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