Yeliz Akmaca 
Bitcoin (BTC) holders are increasingly moving their assets to Wall Street balance sheets via ETFs without selling. This new generation of financial products provides crypto investors a way to integrate their wealth into the regulated financial system.
New Bitcoin ETFs Bring Crypto Wealth to Wall Street
A regulatory change this summer allowed large investors to exchange Bitcoin for ETF shares. Known as an “in-kind transaction,” this process is generally tax-neutral, meaning no cash changes hands and no sale is recorded.
As a result, volatile digital assets now appear as a line item on brokerage statements, making it easier to use as collateral, borrow against, or include in estate plans. Robbie Mitchnick, Head of Digital Assets at BlackRock, stated that the firm has already facilitated over $3 billion in such conversions.
Liquidity provider Galaxy Digital has processed a few similar conversions, while Bitwise Asset Management President Teddy Fusaro noted that investor inquiries for ETF conversions arrive daily.
Bitcoin Whales Discover Traditional Finance Convenience
BlackRock Mitchnick, large Bitcoin holders are realizing the benefits of keeping exposure within their existing private banking or wealth management platforms. Born as a decentralized alternative to traditional finance, Bitcoin is now being gradually absorbed into regulated financial systems.
By exchanging Bitcoin for ETF shares, investors keep their cryptocurrency stake. This also allows them to pledge holdings as collateral, borrow against them, or include them in estate plans — tasks that are risky or cumbersome in private wallets.The ETF wrapper adds legitimacy and ease, turning previously off-grid wealth into assets that institutions can work with.
Fusaro highlighted the advantage for investors:
“An investor might have a $1 million portfolio on a wealth-management platform and $5 million worth of Bitcoin on a ledger. Moving Bitcoin into an ETF allows the platform to recognize them as a $6 million client, unlocking higher-tier services.”
Wall Street and Bitcoin Lines Blur
Mitchnick expects ETF conversions and bank participation to grow rapidly as regulations become clearer. Currently, some banks play a limited role, but they are increasingly involved in the ETF creation process.
“Some investors are going all-in, consolidating their holdings entirely within ETFs, as it’s the easiest way to manage their wealth,” Mitchnick added.
Wes Gray, CEO of Alpha Architect, which specializes in tax-aware ETFs, commented:
“Life is just easier in TradFi. Integration, access, and security have been perfected over a century. Ironically, Bitcoin was born to escape traditional finance, and now its largest holders are returning.”
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