Large Bitcoin holders who accumulated the cryptocurrency early, commonly known as whales, are increasingly moving their holdings into exchange-traded funds (ETFs), with asset managers such as BlackRock actively courting them.
In an interview with Bloomberg, Robbie Mitchnick, BlackRock’s head of digital assets, said the company has already facilitated more than $3 billion worth of these conversions into its iShares spot Bitcoin ETF (IBIT).
After years of self-custody, many whales are recognizing “the convenience of being able to hold their exposure within their existing financial adviser or private-bank relationship,” Mitchnick said.
This shift allows them to maintain Bitcoin (BTC) exposure while integrating their wealth into the traditional financial system, enabling easier access to broader investment and lending services.
Mitchnick partly attributed this trend to a recent US Securities and Exchange Commission rule change that permits in-kind creations and redemptions for crypto ETFs. The adjustment allows authorized participants to exchange ETF shares directly for Bitcoin rather than cash, making large-scale conversions more efficient and tax-friendly for institutional investors.
BlackRock’s IBIT has emerged as the most successful among the dozen or so spot Bitcoin ETFs approved in the United States. In June, IBIT became the fastest ETF in history to surpass $70 billion in assets under management — a figure that has since climbed to over $88 billion, according to data from Bitbo.
Related: BlackRock sees record quarter for iShares ETFs as Bitcoin, Ether demand surges
Not your keys, not your coins?
The trend identified by Mitchnick underscores the growing institutionalization of Bitcoin, more than 15 years after Satoshi Nakamoto mined the genesis block and envisioned a bearer asset built on the principle of self-custody.
Early Bitcoin advocates have long argued that self-custody is the only foolproof way to safeguard one’s funds — a core tenet captured by the mantra, “not your keys, not your coins.”
Yet the rise of spot Bitcoin ETFs and corporate treasury holdings is challenging that ideal, signaling a shift toward more conventional, custodial forms of ownership.
While spot Bitcoin ETFs and direct holdings aren’t necessarily in competition — each serving different types of investors — analyst Willy Woo noted in July that ETF demand may have siphoned interest away from self-custody.
Onchain data, he said, show that self-custodied Bitcoin recently broke a 15-year uptrend, marking a potential turning point in investor behavior.
Still, ETFs have opened the door to a level of institutional participation in Bitcoin that was previously out of reach. The shift has influenced early whales, who once moved markets through their direct buying and selling.
Related: Bitcoin creator Satoshi Nakamoto is the world’s 11th richest person
