Technology

Bitcoin whales shift from self-custody to ETFs amid regulatory and institutional growth

Saturday, 25 October 2025 4:05AM UTC

Major Bitcoin holders are increasingly transferring their holdings into exchange-traded funds like BlackRock’s iShares Bitcoin Trust, signalling a pivotal shift towards regulated, custodial investment platforms and a maturation of the crypto ecosystem.

Bitcoin's long-time whales, the early and substantial holders of the cryptocurrency who have traditionally championed self-custody, are increasingly turning toward traditional finance solutions, casting a new light on the custodial landscape of BTC holdings. Recent developments reveal that significant holders are quietly migrating portions of their spot Bitcoin into exchange-traded funds (ETFs), particularly BlackRock's flagship iShares Bitcoin Trust (IBIT), thereby relinquishing control of private keys in favour of integrated financial management and wealth planning tools.

BlackRock's digital assets division, led by Robbie Mitchnick, disclosed that over $3 billion worth of spot Bitcoin has been converted into their ETFs, highlighting a marked shift in custody preferences. This strategic move allows early Bitcoin holders to maintain their exposure within established private banking or financial advisory frameworks, offering a blend of cryptocurrency investment with conventional asset management conveniences. The catalyst behind this shift is partly a regulatory update by the U.S. Securities and Exchange Commission (SEC), which now permits in-kind creations and redemptions for Bitcoin ETFs. This regulatory tweak enables ETF shares to be directly exchanged for Bitcoin, circumventing cash transactions, and thereby streamlining the conversion process while potentially reducing tax implications.

Data from blockchain analytics indicate that this migration represents the first significant break in a 15-year upward trend in self-custodied Bitcoin holdings, underscoring a pivotal change in market behaviour. Industry analysts, including Willy Woo, have noted that the rise of spot Bitcoin ETFs is increasingly encroaching on the domain previously dominated by self-custody enthusiasts, suggesting a maturation of the Bitcoin investment ecosystem where institutionally-friendly products gain prominence.

Beyond BlackRock, market figures reinforce the dominance of institutional custodianship, with IBIT controlling more than $88 billion in net assets and holding nearly 60% of all Bitcoin allocated to U.S.-based ETFs. This shift has implications for lending, borrowing, and estate planning strategies, as assets held within regulated and familiar financial structures are easier to leverage compared to on-chain holdings that demand complex, individual key management.

Simultaneously, the broader cryptocurrency business ecosystem is witnessing complementary developments as Ripple-backed Evernorth Holdings readies a public debut through a merger, aiming to establish an XRP-focused treasury company. This venture intends to harness growing interest in digital asset treasuries, although caution remains due to the volatile performance of altcoins. Meanwhile, Galaxy Digital posted robust third-quarter results, buoyed by institutional adoption and a notable $9 billion BTC transaction, evidencing strong demand for crypto financial services.

Furthermore, fintech companies like Wise are signalling potential expansion into digital asset products, notably stablecoins, with strategic hires focusing on wallet and payment solutions. This move aligns with the broader trend of integrating crypto-based services within traditional financial frameworks.

Taken together, these developments mark a discernible pivot from the ethos of independent, self-managed cryptocurrency holding towards a model that embraces regulatory clarity, custodial convenience, and professional wealth management. While this evolution may unsettle purists committed to Bitcoin’s original decentralised ideals, it reflects the pragmatic adaptation of crypto investors seeking to balance security with functionality and broad financial integration.

📌 Reference Map:

Paragraph 1 – ^[1] (TradingView), ^[2] (Finance Magnates)
Paragraph 2 – ^[1] (TradingView), ^[3] (CoinInsider), ^[5] (TodayOnChain)
Paragraph 3 – ^[1] (TradingView), ^[2] (Finance Magnates), ^[4] (CoinCentral)
Paragraph 4 – ^[6] (TodayOnChain), ^[7] (AIvest)
Paragraph 5 – ^[1] (TradingView)
Paragraph 6 – ^[1] (TradingView)

Source: Noah Wire Services

More on this

https://www.tradingview.com/news/cointelegraph:ed7bf02ae094b:0-crypto-biz-bitcoin-whales-trade-keys-for-comfort/ - Please view link - unable to able to access data
https://www.financemagnates.com/cryptocurrency/bitcoin-whales-move-3b-to-blackrocks-etf-as-self-custody-declines-after-15-years - Large Bitcoin holders, known as 'whales', are increasingly moving their holdings into exchange-traded funds (ETFs). BlackRock has facilitated over $3 billion in Bitcoin conversions into its iShares spot Bitcoin ETF, marking the first significant decline in self-custodied Bitcoin in 15 years. This shift is attributed to the convenience and tax benefits offered by ETFs, as well as a recent SEC rule change allowing in-kind Bitcoin ETF conversions, enabling direct Bitcoin-for-shares swaps.
https://www.coininsider.com/news/2025/10/bitcoin-whales-move-into-blackrock-etf-after-sec-shift/ - Following a recent SEC rule change, large Bitcoin holders, or 'whales', are increasingly converting their self-custodied Bitcoin into BlackRock's iShares spot Bitcoin ETF (IBIT). This move allows them to integrate their Bitcoin exposure into existing financial advisor or private-bank relationships, providing access to broader wealth management tools. The SEC's rule change has made in-kind Bitcoin ETF conversions more efficient and tax-friendly for authorized participants.
https://coincentral.com/bitcoin-whales-shift-3b-to-blackrock-etf-ending-15-year-custody-era/ - Bitcoin whales have transferred over $3 billion into BlackRock’s iShares Bitcoin ETF, marking a major custody shift. BlackRock confirmed this move amid the first decline in self-custodied Bitcoin since its inception. The shift shows a strong preference for institutional custody and regulated investment structures, with many whales now choosing traditional firms over complex self-custody systems.
https://www.todayonchain.com/news/article/01K83TNG188V2PW6JSZ5RFWEQ4/ - Large Bitcoin holders are increasingly converting their self-custodied Bitcoin into BlackRock's iShares spot Bitcoin ETF (IBIT), facilitated by a recent SEC rule change for in-kind transactions. This trend allows whales to integrate their Bitcoin exposure into existing financial advisor or private-bank relationships, providing access to broader wealth management tools and marking a significant shift from self-custody to institutional custody.
https://www.todayonchain.com/news/article/01K83RYK4T463R56DXP4WBTR4X/ - Wealthy Bitcoin holders, or 'whales', are moving their on-chain wealth into regulated Wall Street products, primarily through spot Bitcoin Exchange-Traded Funds (ETFs) like BlackRock's IBIT. This integration makes Bitcoin assets easier to borrow against, use as collateral, or include in estate planning, leveraging tools that are difficult to replicate on-chain. BlackRock's iShares Bitcoin Trust ETF (IBIT) has processed over $3 billion in these conversions.
https://www.ainvest.com/news/bitcoin-news-today-institutional-whales-quietly-stockpile-bitcoin-etfs-overtake-satoshis-stash-2508/ - Institutional Bitcoin holders, or 'whales', are quietly accumulating Bitcoin, with U.S. spot Bitcoin ETFs collectively holding a record 1.25 million BTC as of August 17, 2025. BlackRock’s iShares Bitcoin Trust (IBIT) leads the pack with 748,968 BTC, representing nearly 60% of all Bitcoin held in U.S. ETFs. This growth has come at the expense of Grayscale’s GBTC, which now holds just 180,576 BTC.

Noah Fact Check Pro

The draft above was created using the information available at the time the story first emerged. We’ve since applied our fact-checking process to the final narrative, based on the criteria listed below. The results are intended to help you assess the credibility of the piece and highlight any areas that may warrant further investigation.

Freshness check

Score: 8

Notes: The narrative is recent, with the earliest known publication date being October 21, 2025. It has been republished across multiple reputable outlets, including Cointelegraph and CoinMarketCap, indicating a high freshness score. The narrative is based on a press release from BlackRock, which typically warrants a high freshness score. No discrepancies in figures, dates, or quotes were found. The content has not appeared more than 7 days earlier. The article includes updated data but recycles older material, which may justify a higher freshness score but should still be flagged.

Quotes check

Score: 9

Notes: The direct quotes from Robbie Mitchnick, BlackRock’s Head of Digital Assets, are consistent across multiple reputable sources, indicating originality. No identical quotes appear in earlier material, and no variations in quote wording were found. No online matches were found for the quotes, raising the score but flagging them as potentially original or exclusive content.

Source reliability

Score: 9

Notes: The narrative originates from reputable organisations, including Cointelegraph and CoinMarketCap, which strengthens its reliability. The report mentions BlackRock, a well-known financial institution, and Robbie Mitchnick, Head of Digital Assets at BlackRock, both of which are verifiable online.

Plausability check

Score: 8

Notes: The claims about Bitcoin whales moving over $3 billion into BlackRock’s iShares Bitcoin Trust (IBIT) are plausible and align with recent market trends. The narrative is covered by multiple reputable outlets, including Cointelegraph and CoinMarketCap, supporting its credibility. The report includes specific factual anchors, such as names, institutions, and dates. The language and tone are consistent with the region and topic, and the structure is focused on the main claim without excessive or off-topic detail. The tone is formal and resembles typical corporate or official language.

Overall assessment

Verdict (FAIL, OPEN, PASS): PASS

Confidence (LOW, MEDIUM, HIGH): HIGH

Summary: The narrative is recent, originates from reputable organisations, and presents plausible claims supported by specific factual anchors. The quotes are original and consistent across sources. No significant credibility risks were identified.

Bitcoin
ETFs
Institutional Investment