Bitcoin holders are increasingly moving their digital assets from the blockchain into Wall Street’s established financial ecosystem. With the support of major asset managers like BlackRock, individuals can now convert their Bitcoin holdings into ETF shares, maintaining their cryptocurrency exposure while benefiting from the convenience of traditional finance.
A New Pathway for Bitcoin to Wall Street
A recent regulatory development has enabled large investors to execute "in-kind" transactions. This allows for the direct exchange of Bitcoin for shares of an ETF, without any cash changing hands and, crucially, without triggering a taxable sale. This process facilitates a smooth, tax-neutral swap, effectively transforming cryptocurrency into a tradable asset that aligns with traditional financial frameworks.
BLACKROCK DRAWS BITCOIN WHALES INTO WALL STREET
Big Bitcoin holders are shifting funds into Wall Street ETFs after July’s rule change allowing tax-free, in-kind Bitcoin transfers. BlackRock has converted over $3 billion so far, with Bitwise and Galaxy seeing rising demand. The…
October 21, 2025
According to Bloomberg, Robbie Mitchnick, BlackRock's head of digital assets, reported that the firm has facilitated over $3 billion in such conversions. Both Bitwise Asset Management and Galaxy Digital are observing a growing interest in this mechanism, as investors recognize the ease with which Bitcoin can be integrated into the broader financial system without relinquishing ownership.
Motivations Behind the Shift to ETFs
Mitchnick explained that a significant number of large Bitcoin holders are seeking more streamlined asset management. They desire their cryptocurrency holdings to be integrated with their existing portfolios of stocks and bonds on wealth management platforms. By utilizing Bitcoin ETFs, investors can leverage them as collateral, borrow against them, or incorporate them into their estate planning.
2025 “has been a fairly positive year,” BlackRock head of digital assets Robbie Mitchnick says, adding: However, that Friday the 10th episode “shone a light, I think, on some of the challenging, maybe concerning dynamics in the space.” pic.twitter.com/v2oLGNj5uX
October 20, 2025
Teddy Fusaro, president of Bitwise, offered a practical illustration: an individual with $1 million in their wealth account and an additional $5 million in Bitcoin might still be treated as a $1 million client by their advisor. However, once that Bitcoin is converted into an ETF, they become eligible for enhanced services and benefits, reflecting their true net worth.
The Convergence of Bitcoin and Traditional Finance
The current trend presents a notable irony, as Bitcoin was originally conceived to operate outside the traditional financial system. Yet, Wall Street is now actively drawing it back in, with Bitcoin holders increasingly prioritizing the practical advantages offered by traditional finance over ideological adherence.
According to Bloomberg, major asset managers like BlackRock are encouraging large Bitcoin holders to move their coins into ETFs via in-kind transfers, bringing them into the Wall Street system. BlackRock’s head of digital assets, Robbie Mitchnick, said the firm has already…
October 21, 2025
BlackRock's initiative is fundamentally altering how Bitcoin holders manage their wealth, simplifying the process by presenting cryptocurrency as a familiar financial product through ETFs. This development signifies a crucial step towards broader acceptance and integration of Bitcoin within the Wall Street landscape.