Some of Bitcoin’s biggest holders, popularly known as whales, are quietly moving billions of dollars’ worth of coins into spot exchange-traded funds (ETFs).

On Oct. 21, Bloomberg reported that these whales executed roughly $3 billion in in-kind transfers through BlackRock’s iShares Bitcoin Trust (IBIT). Instead of selling, they handed their Bitcoin to the ETF in exchange for fund shares, a process known as custom creation.

Notably, this migration was made possible by a July 2025 SEC policy change approving in-kind creations and redemptions for crypto ETFs. The rule lets authorized participants deliver the underlying Bitcoin rather than cash, aligning digital-asset funds with commodity ETF practices used for gold or oil.

Meanwhile, this move presents a structural shift that could redefine how the flagship digital asset functions within global markets.

Bloomberg ETF analyst Eric Balchunas described it as a turning point, noting that even long-time crypto purists recognize traditional finance’s advantages.

He said:

“Tradfi (ETFs in particular) is more badass than crypto thinks.”

Why are Bitcoin whales turning to ETFs?

Nicolai Søndergaard, a research analyst at Nansen, told CryptoSlate that the ETF creations allow whales to defer taxes by swapping Bitcoin for fund shares.

According to him, this helps these cohorts to preserve their BTC exposure without selling. He also noted that the actions are “bullish because it removes Bitcoin from circulation.”

However, he pointed out that the “downside is not being able to trade 24/7 and having to stick to normal trading hours, but it is likely that these whales aren’t active traders anyway.”

Meanwhile, analysts at Bitunix told CryptoSlate that Bitcoin whales engage in these portfolio trades because the

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Author: Oluwapelumi Adejumo