Large bitcoin holders are swapping coins they guard themselves for shares of BlackRock’s iShares Bitcoin Trust (IBIT) at a record pace, the firm’s head of digital assets said Monday, as kidnappings and hacks push security to the top of their list.
“The current moment is the highest we’ve seen at any point,” Robbie Mitchnick told Barron’s, adding that demand for the swaps “has sort of been one way — up.” Of all the reasons clients give, he said, “the single largest one is security and peace of mind.”
The trades are in-kind conversions. A holder delivers bitcoin to the fund through an intermediary and receives newly created IBIT shares, without first selling the coins for cash. BlackRock relies on Galaxy Digital, Talos and Virtu to handle the transactions, and those firms set the minimum size.
Barron’s put the volume BlackRock has seen at $3.6 billion, noting the real figure could be larger because the firm does not process every conversion itself. Mitchnick cited a bigger number in August, telling Bloomberg that IBIT had facilitated more than $5 billion of such swaps, up from more than $3 billion in October 2025.
In that August interview, BlackRock’s Mitchnick named the threats outright: “People see things happen in the outside world — whether it’s kidnappings, ransom, custody failures — that motivate them to make this switch for all or some of their holdings.”
He told Barron’s the recent Binance hack was not news to big holders. “Most large Bitcoin holders were already acutely aware of the risk of holding on an exchange and in a hot wallet,” he said.
How BlackRock’s swaps became possible
The SEC voted on July 29, 2025, to let spot bitcoin and ether funds create and redeem shares in kind, ending the cash-only structure it required when the funds launched in January 2024.
Access has widened since. BlackRock’s minimum started around $30 million and now hovers between $1 million and $2 million, Barron’s reported.
Taxes are part of the pitch. Converting appreciated bitcoin into IBIT in kind “generally isn’t seen as a sale that would trigger capital-gains taxes,” Barron’s wrote, while Bloomberg cautioned that avoiding an immediate bill depends on the investor’s circumstances. Mitchnick also pointed to estate planning, calling it “much, much simpler” to hold the exposure “within the confines of their private bank.”
Once inside, the coins sit with IBIT’s custodian, an affiliate of Coinbase Prime, in what Mitchnick called an “institutional-grade cold-storage model.” The fund held 795,921 BTC, worth about $60.4 billion, as of Nov. 6.
Why the flow numbers overstate demand
An in-kind creation adds IBIT shares and counts toward the fund’s reported flows, but no bitcoin is bought on the open market. The coins already existed and simply changed wrappers, so headline flow figures overstate new cash.
Cash has been moving the other way. U.S. spot bitcoin ETFs lost about $1.28 billion in the week ended Nov. 6, their worst week since June, and IBIT accounted for about $1.21 billion of that, Farside Investors data shows.
Self-custody under pressure
The fears behind the trade are documented. French authorities have recorded 77 crypto-linked kidnappings, extortion cases and home invasions so far in 2026, more than in all of 2025, the OCCRP reported, citing the national organized crime prosecutor. Reuters reported last year that Ledger’s co-founder lost a finger after being kidnapped with his wife.
The U.S. has its own cases, including a failed Connecticut plot to force a family to hand over bitcoin. Bitcoin security researcher Jameson Lopp maintains a public list of physical attacks on holders dating back to 2014, and the Coldcard bug in August put hardware wallets under scrutiny too.
The shift cuts against bitcoin’s founding pitch of holding money without a bank. Holders who convert give up their private keys for a brokerage claim, trading the risk of guarding coins themselves for reliance on BlackRock, its custodian and the market makers in between.
