For long-term Bitcoin holders, custody concerns can influence not just where assets are held, but how exposure is maintained. A November 9, 2026, TechFlow report, citing BeInCrypto, said large holders had exchanged more than $5 billion worth of BTC for shares in BlackRock’s iShares Bitcoin Trust (IBIT).
In-kind conversion rather than a Bitcoin sale
According to the report, holders exchanged existing Bitcoin directly for fund shares through in-kind conversions, without selling the BTC. This structure could defer taxation; the report did not describe that outcome as guaranteed.
The distinction for holders is between retaining Bitcoin and receiving fund shares in exchange. The report also noted that these conversions use existing BTC and do not bring new cash into the market.
Security concerns cited as a driver
BlackRock’s head of digital assets, Robbie Mitchnick, cited kidnappings, extortion and custodial failures as factors driving the trend. He expected it to continue growing. Those comments describe motivations for the shift, not evidence that fund ownership eliminates custody or security risks.
Regulatory approval and a lower threshold
The report said U.S. regulators approved in-kind creations and redemptions for crypto-asset ETFs in July 2025. BlackRock subsequently lowered its minimum conversion threshold from $25 million to $1 million in July 2026.
For holders considering the custody trade-off, the central distinction is the asset received: IBIT shares rather than Bitcoin held directly. The reported security motivations and possible tax deferral should be understood separately from any assurance of safety or a guaranteed tax outcome.
Original publication: November 9, 2026, at 23:39:43 (UTC+8). Read the original TechFlow article, citing BeInCrypto.