{"id":249357,"date":"2026-11-09T16:30:00","date_gmt":"2026-11-09T16:30:00","guid":{"rendered":"https:\/\/mycryptomania.com\/?p=249357"},"modified":"2026-11-09T16:30:00","modified_gmt":"2026-11-09T16:30:00","slug":"blackrock-security-fears-are-driving-bitcoin-whales-into-ibit","status":"publish","type":"post","link":"https:\/\/mycryptomania.com\/?p=249357","title":{"rendered":"BlackRock: Security Fears Are Driving Bitcoin Whales Into IBIT"},"content":{"rendered":"

Bitcoin Magazine<\/a><\/p>\n

BlackRock: Security Fears Are Driving Bitcoin Whales Into IBIT<\/a><\/p>\n

<\/div>\n

Large bitcoin holders are swapping coins they guard themselves for shares of BlackRock\u2019s iShares Bitcoin Trust (IBIT) at a record pace, the firm\u2019s head of digital assets said Monday, as kidnappings and hacks push security to the top of their list.<\/p>\n

\u201cThe current moment is the highest we\u2019ve seen at any point,\u201d Robbie Mitchnick told<\/a> Barron\u2019s<\/em>, adding that demand for the swaps \u201chas sort of been one way \u2014 up.\u201d Of all the reasons clients give, he said, \u201cthe single largest one is security and peace of mind.\u201d<\/p>\n

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.<\/p>\n

Barron\u2019s<\/em> 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<\/a> Bloomberg<\/em> that IBIT had facilitated more than $5 billion of such swaps, up from more than $3 billion in October 2025<\/a>. <\/p>\n

In that August interview, BlackRock\u2019s Mitchnick named the threats outright: \u201cPeople see things happen in the outside world \u2014 whether it\u2019s kidnappings, ransom, custody failures \u2014 that motivate them to make this switch for all or some of their holdings.\u201d<\/p>\n

He told Barron\u2019s<\/em> the recent Binance hack<\/a> was not news to big holders. \u201cMost large Bitcoin holders were already acutely aware of the risk of holding on an exchange and in a hot wallet,\u201d he said.<\/p>\n

How BlackRock\u2019s swaps became possible<\/h2>\n

The SEC voted<\/a> on July 29, 2025, to let spot bitcoin and ether funds create and redeem shares in kind, ending<\/a> the cash-only structure it required when the funds launched in January 2024.<\/p>\n

Access has widened since. BlackRock\u2019s minimum started around $30 million and now hovers between $1 million and $2 million, Barron\u2019s<\/em> reported.<\/p>\n

Taxes are part of the pitch. Converting appreciated bitcoin into IBIT in kind \u201cgenerally isn\u2019t seen as a sale that would trigger capital-gains taxes,\u201d Barron\u2019s<\/em> wrote, while Bloomberg<\/em> cautioned that avoiding an immediate bill depends on the investor\u2019s circumstances. Mitchnick also pointed to estate planning, calling it \u201cmuch, much simpler\u201d to hold the exposure \u201cwithin the confines of their private bank.\u201d<\/p>\n

Once inside, the coins sit with IBIT\u2019s custodian, an affiliate of Coinbase Prime, in what Mitchnick called an \u201cinstitutional-grade cold-storage model.\u201d The fund held<\/a> 795,921 BTC, worth about $60.4 billion, as of Nov. 6.<\/p>\n

Why the flow numbers overstate demand<\/h2>\n

An in-kind creation adds IBIT shares and counts toward the fund\u2019s 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.<\/p>\n

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<\/a>.<\/p>\n

Self-custody under pressure<\/h2>\n

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<\/a>, citing the national organized crime prosecutor. Reuters<\/em> reported<\/a> last year that Ledger\u2019s co-founder lost a finger after being kidnapped with his wife.<\/p>\n

The U.S. has its own cases, including a failed Connecticut plot<\/a> to force a family to hand over bitcoin. Bitcoin security researcher Jameson Lopp maintains<\/a> a public list of physical attacks on holders dating back to 2014, and the Coldcard bug<\/a> in August put hardware wallets under scrutiny too.<\/p>\n

The shift cuts against bitcoin\u2019s 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.<\/p>\n

This post BlackRock: Security Fears Are Driving Bitcoin Whales Into IBIT<\/a> first appeared on Bitcoin Magazine<\/a> and is written by Micah Zimmerman<\/a>.<\/p>","protected":false},"excerpt":{"rendered":"

Bitcoin Magazine BlackRock: Security Fears Are Driving Bitcoin Whales Into IBIT Large bitcoin holders are swapping coins they guard themselves for shares of BlackRock\u2019s iShares Bitcoin Trust (IBIT) at a record pace, the firm\u2019s head of digital assets said Monday, as kidnappings and hacks push security to the top of their list. \u201cThe current moment […]<\/p>\n","protected":false},"author":0,"featured_media":249358,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[],"class_list":["post-249357","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-discovery"],"_links":{"self":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/posts\/249357"}],"collection":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=249357"}],"version-history":[{"count":0,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/posts\/249357\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/media\/249358"}],"wp:attachment":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=249357"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=249357"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=249357"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}