Whales Shift $3B into Spot Bitcoin ETFs via In-Kind Creations

Large Bitcoin holders are increasingly using tax-neutral in-kind creations to convert over $3 billion of BTC into spot bitcoin ETFs following the SEC’s July ruling allowing physical bitcoin exchanges for ETF shares. Authorized participants can now swap coins for ETF units without triggering taxable events, preserving price exposure while enabling asset borrowing and estate planning. BlackRock has processed more than $3 billion in in-kind creations, while Bitwise and Galaxy report surging client interest. Spot bitcoin ETF inflows reversed recent outflows, led by IBIT with $209 million, ARKB with $163 million, and notable gains at Fidelity, Bitwise, and VanEck. Analysts say in-kind creation aligns crypto ETPs with commodity fund practices, lowers costs, and integrates BTC into traditional finance. Traders should watch spot bitcoin ETF inflows for signs of increased liquidity and secondary market demand, as continued institutional adoption could support BTC’s price outlook.