Large Bitcoin holders, often called whales, are increasingly moving their holdings into exchange-traded funds. Asset managers, including BlackRock, are seeking to attract these early investors.

Robbie Mitchnick, BlackRock’s Head of Digital Assets, told Bloomberg that the company has facilitated more than $3 billion worth of Bitcoin conversions into its iShares spot Bitcoin ETF, as self-custodied Bitcoin declines for the first time in 15 years.

Institutional Investors Benefit from In-Kind Crypto ETF Adjustments

Mitchnick said that after years of self-custody, many whales now prefer the convenience of maintaining their Bitcoin exposure through traditional financial institutions. This approach lets them manage their wealth via existing advisers and access broader investment and lending services.

Digital assets meet tradfi in London at the fmls25

[#highlighted-links#]

Mitchnick partly attributed the trend to a recent rule change by the US Securities and Exchange Commission. The adjustment allows in-kind creations and redemptions for crypto ETFs, enabling authorized participants to exchange ETF shares directly for Bitcoin instead of cash — a process that is more efficient and potentially more tax-friendly for institutional investors.

Bitcoin Integration Grows as Self-Custody Declines

The trend highlights Bitcoin’s deeper integration into the traditional financial system and a shift away from the self-custody ideal of “not your keys, not your coins.” Analyst Willy Woo noted that the decline in self-custodied Bitcoin reflects changing investor behavior as ETFs attract greater institutional participation and influence early whales.

Regulated Crypto ETFs Expand in Costa Rica, Australia, and UK

Costa Rica’s bank, Banco Nacional, is preparing to launch a spot Bitcoin ETF, providing regulated crypto exposure to local investors. The ETF, priced in USD with a $100 minimum, will be the country’s first crypto investment product offered through the traditional banking system, amid a developing regulatory framework.

Similar developments have occurred internationally. Australia’s ASX recently launched its first Bitcoin ETF, the VanEck Bitcoin ETF, which invests in the US-listed VanEck Bitcoin Trust, reflecting growing investor interest in regulated crypto products.

In the UK, the Financial Conduct Authority approved two WisdomTree crypto ETPs for the London Stock Exchange, with 21Shares preparing its own instrument following regulatory clearance.

Source: Finance Magnates