BlackRock and other asset managers are actively drawing Bitcoin whales towards Wall Street, as reported by Bloomberg.
Large holders of Bitcoin in the US, who have maintained significant amounts of the cryptocurrency for extended periods, have begun converting their spot Bitcoin assets into Exchange Traded Funds (ETFs).
BlackRock Leads the Conversion Trend
BlackRock is at the forefront of this movement. Robert Mitchnick, Head of Digital Assets at BlackRock, stated that the company has already facilitated the conversion of over $3 billion worth of Bitcoin into its ETF.
A regulatory change enacted in July enabled large investors to transfer their Bitcoin directly into an ETF and trade it for shares. This regulatory shift involved modifications by both the IRS and SEC, allowing investors to convert their Bitcoin into ETFs without incurring immediate taxes.
Following this rule change, substantial Bitcoin holders have started migrating their funds to Wall Street-based ETFs.
BlackRock has successfully completed over $3 billion in ETF conversions to date. Concurrently, demand for ETFs from Bitwise and Galaxy is also experiencing a notable increase.
While Mitchnick refrained from commenting on the specific number of trades made by whales under the IBIT ETF, he indicated that increased regulatory clarity would likely boost trading volumes and the participation of major financial institutions.
Mitchnick further elaborated that client demand varies, with some investors seeking to move approximately 20% of their Bitcoin holdings into an ETF, while others are looking to transition their entire Bitcoin assets into traditional finance (TradFi) structures.