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.
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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 whales quietly embrace BlackRock ETF following SEC rule change. Bitcoin’s biggest holders are moving billions into ETFs like BlackRock’s IBIT, signaling a new phase of institutional adoption.
— Crypto News ???? (@btc_af) October 21, 2025
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.
This article was written by Tareq Sikder at www.financemagnates.com.
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