Large Bitcoin holders are turning to physical delivery of their holdings in exchange for ETF shares, and BlackRock has facilitated more than $3 billion in related conversions

According to Foresight News, according to Bloomberg, some large Bitcoin holders are currently exchanging their Bitcoin positions for ETF shares in the form of physical delivery. A regulatory change this summer allowed large investors to hand over Bitcoin to an ETF in exchange for fund shares, known as physical delivery, which applies to most ETFs but was not approved for Bitcoin products until July of this year. The process is generally tax-neutral, requires no cash transaction, and no need to record the sale. After conversion, these assets will turn from digital assets with high volatility into assets that can be more easily mortgaged on brokers' statements, used as collateral, or passed on to heirs. When assets are stored in private digital wallets, these operations become cumbersome, dangerous, or even impossible. The wrapper of ETFs provides legitimacy and convenience, turning once-hidden wealth into something banks and advisors can handle.


BlackRock has facilitated more than $3 billion in such conversions, according to Robbie Mitchnick, BlackRock’s head of digital assets. Bitwise Asset Management said investors are now asking every day how to transfer their holdings to a wealth management platform. Michael Harvey, head of franchise trading at liquidity provider Galaxy, said the company had processed a small number of conversions so far.

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