You Won't Believe What BlackRock Just Did.... | EP 1568

**Nico Moran** (0:02)
In the same week that the ETF inflows are back at three-month highs, BlackRock just made an announcement that is going to centralize even more Bitcoin in their hands. And this move comes only days after the $100 million Bitcoin that was stolen in the biggest wallet exploit in history.
But you guys judge for yourself as you watch this clip, would you be giving BlackRock your Bitcoin to control, to hold on to safely? I think we know the answer, but let's watch the clip before I get into all of the details here.

**SPEAKER_2** (0:43)
We've seen the amount of in-kind activity be a growing number over the three quarters now that that's been allowed.
And we've been working quite hard to help bring the minimum down because there's interest in this from investors of all sizes. When we first started, 25 million was the minimum that you needed to be able to do one of these in-kind conversions. Now that's come all the way down to around 1 million. And hopefully one day it'll be accessible at any size. That's our hope. And so that's been great progress. Why is it so expensive? Well, it's about the size, right? So there's some manualness to the transaction that needs to be undertaken. So it's about what providers are willing to support just to make the math and the administrative process work.

**SPEAKER_3** (1:31)
So just to be clear, so if you're an early Bitcoin holder, you had some in a cold wallet, and maybe you want to move some over to BlackRock, if you have a million dollars in Bitcoin, you can just give it to BlackRock through an AP or a third party, and you'll get iBit shares in return, and that's like a tax-free transaction.

**SPEAKER_2** (1:49)
Yeah, so everything is intermediated, as you said, by an authorized participant, so that's the key. We actually don't have the ability to support that directly to investors, but there are a number of participants in the ecosystem who stepped up and who have been facilitating that for investors, and their willingness to do it at smaller and smaller sizes has been a really positive development.

**Nico Moran** (2:12)
So there, you heard it, guys. So in response to the cold card exploit, what does BlackRock do? They lower the minimums for the in-kind redemption. And as you heard in the clip, it's basically you send BlackRock your Bitcoin, they gave you ETF shares. And this is really part of the whole conversation that we've been all a part of recently, where it's, is it too dangerous to hold your own Bitcoin? And there's been a lot of in the Bitcoin community that's like, no, this is not the right response. Do not be sending your Bitcoin to exchanges or ETFs. Maybe send some Bitcoin to an exchange for the very short term until you figure out what you're going to do if you are a cold card user. But there has been a very adamant amount of Bitcoiners that have been saying, yeah, this is why we want the ETF. This is why I think most people should use the ETF.
And the rabbit hole doesn't stop there. All right, so let's start with how much Bitcoin the BlackRock iBit ETF currently holds, which is about 811,000, or more precise, 811,291.
So as we've heard the rumors and speculation, I think even Larry Fink and them have said it themselves, they're trying to get to that million Bitcoin. Well, this is obviously a good incentive for some people to send them more Bitcoin. And again, as we've been covering, I've been kind of glossing it over on the show, but the ETF inflows this week are back to levels we haven't seen in April. So you could look at it two way, either there is smart money that is trying to reenter the market, and by smart money, I really mean Wall Street institutional investors. They're starting to look at Bitcoin. It's looking a little, you know, a little juicy. They're like, okay, this might be a good buy. Now they're going through the ETF, through the institution. Part of that inflow could potentially be this playing out in real time. And again, the rabbit hole doesn't start or really stop there. Yes, BlackRock announced very quickly that they're going to lower the income redemptions, but it is very interesting because a very popular, in particular, Bitcoiner claims to be the genesis of this move. So we have here on Twitter, British Hoddle.
You may like British Hoddle, you may not, but he is a Bitcoiner, he makes content. He, in particular, said in response to the cold card, he went out, he messaged the BlackRock, you know, his whatever hedge fund manager or someone under Robbie Mitchnick, and he was basically saying, hey, look, because the cold card hacked happen, I think you should lower the minimums on this Encon Redemption from about 50 million where it started to where it was at 25 million to how low can we get this so that more people can use this product? And he basically said, I was on the phone with them, you know, I talked to them, I was telling them the case, and they were like, okay, we're going to listen, which on the one hand, I will give it to BlackRock here. They are listening, I guess, to the customers. That's, I guess, a good thing, right? But it really goes into the broader conversation of BlackRock holding a lot of your Bitcoin. Now, I know there's the institutional custody view, oh, they're FDIC insured, they have the reputation. But from us Bitcoiners, from the more tinfoil hat Bitcoiner, we're like, this is not the move, guys. This is not the move to send BlackRock your Bitcoin. Though, as you can tell even from that clip, there is some incentives for a lot of people to send their Bitcoin, obviously, a tax-free movement.