BlackRock Bitcoin ETF (IBIT): Verificability of custody, scale and risk

BlackRock Bitcoin ETF (IBIT): Verifiable facts about custody, size and risk

BlackRock's iShares Bitcoin Trust (code: IBIT) will be launched in January 2024. The trust was established as a grantor trust under Delaware law to hold Bitcoin and issue shares that track its value. It is not a mutual fund registered under the Investment Company Act of 1940 and therefore does not apply to the custody rules, leverage limits or governance requirements set out in the Act. Holding an IBIT stake means having a beneficial interest in the trust, rather than direct ownership of a specific Bitcoin.

Who actually holds Bitcoin?

It is reported that Coinbase, through its custodian trust company Coinbase Custody Trust Company, is the centralized custodian of most spot Bitcoin ETFs, including IBIT. Documents filed on April 8, 2025 show that BlackRock added Anchorage Digital Bank as the secondary custodian of IBIT and its Ethereum fund ETHA. The document states that Anchorage is the only federally chartered digital asset bank in the United States and obtained its license from the Office of the Comptroller of the Currency in January 2021. At the time of filing, BlackRock said the funds involved were US$45 billion for IBIT and US$1.8 billion for ETHA.

According to reports, BlackRock said its cooperation with Anchorage will not affect its existing custody relationship with Coinbase and has no plans to transfer existing funds, but reserves the right to allocate assets between the two custodians at its discretion. BlackRock described the move as a manifestation of a "continuous risk management approach" and an "expansion of its presence in the digital asset space." Nathan McCauley, co-founder and CEO of Anchorage, said in a statement that the bank aims to "set a new standard for tailored access" for digital assets. The specific allocation ratio of IBIT's bitcoin between Coinbase and Anchorage has not been publicly disclosed, and BlackRock can change this allocation without making a public statement.

There are differences in custody arrangements for different funds. According to reports, Fidelity manages the bitcoins behind its funds;VanEck uses Gemini as a custodian; and Anchorage solely holds the assets of 21Shares funds. Fidelity's self-custody is conducted through its affiliated company Fidelity Digital Assets.

? Depending on the data used

There is no single current data for the size of IBIT because different sources use different measurements on different dates. According to the report, IBIT has become the fastest ETF in history to reach US$70 billion in assets, achieving it in just 341 days since its launch in January 2024, with net assets of US$70.7 billion as of that date. The same report stated that as of October 2025, IBIT had incurred approximately US$245 million in annual fees, held more than 3% of the total Bitcoin supply, and attracted more than US$52 billion in net inflows in its first year.

Another later data comes from BlackRock's own position disclosure, showing that as of July 15, 2026, IBIT held 734,762 bitcoins worth US$48 billion. This data is reported by BlackRock itself and reflects different dates and bitcoin prices from November 2025 data and are not comparable or averaged. At a blockchain conference in São Paulo, BlackRock's Brazil business development director Cristiano Castro said that the combined configuration of IBIT and its IBIT39 products listed in Brazil was close to US$100 billion, calling the scale "surprising." He also said BlackRock's own portfolio of strategic revenue opportunities had increased its IBIT holdings by 14%.

Expanding the perspective to the entire category, the report on May 6, 2026 showed that the total assets of the U.S. spot Bitcoin ETF were approximately US$107 billion, of which approximately US$20 billion were held by institutional hedge funds, US$12.5 billion was allocated by registered investment advisers, and approximately 60% was directly held by retail investors. Christopher Russell of Calamos Investments pointed out that $12.5 billion is small compared to total assets under management by advisers of $146 trillion, and he attributed the gap in part to the so-called "1% problem": advisers are reluctant to talk to clients about volatile assets, even when the allocation ratio is small.

What happens if promoter BlackRock goes bankrupt?

The IBIT Trust is a legal entity independent of BlackRock. If BlackRock, as the initiator, fails, its creditors usually have no access to the trust's bitcoins, and the trustee (BlackRock Fund Advisor) will retain the right to continue operations or terminate the trust. The bankruptcy of the promoter could trigger a termination clause in the trust agreement: the trustee would sell Bitcoin, pay fees and creditors, and distribute the remaining cash to shareholders through the depositary trust company. During this process, trading may be suspended and shares may be traded at prices below the market price of Bitcoin. The report emphasizes that this is entirely theoretical because no major spot Bitcoin ETF promoters have gone bankrupt since the category was launched in January 2024, and the analysis is based on Delaware Trust Law rather than actual cases.

What happens if the custodian goes bankrupt?

The report points out that the greater disclosed risk lies with the custodian rather than the promoter. Most spot Bitcoin ETFs have assets centrally held in Coinbase Custody Trust Company. If Coinbase goes bankrupt, the bankruptcy court may rule that bitcoins quarantined for ETF customers still form part of Coinbase's bankruptcy estate, which would allow the trust to hold unsecured claims rather than direct ownership. An automatic stay order would then suspend recovery efforts, and the litigation process could last for years and only recover part of the fund's value. The New York State Department of Financial Services has issued guidance that tends to treat custody customers as beneficiaries of custody assets rather than ordinary creditors in bankruptcy, but the guidance is not binding on federal bankruptcy courts. The 2022 FTX collapse is seen as the closest realistic precedent noted by regulators and lawyers, in which mixed customer assets were included in bankruptcy proceedings.

Insurance only covers some risks. Coinbase maintains approximately $320 million in crime insurance, which is shared among all of its institutional custody customers, while the total amount of Bitcoin held by the Spot Bitcoin ETF exceeds $100 billion, the report said. Custodian liability agreements set compensation caps as low as $5 million in some cases. Accounts holding ETF shares are individually protected by SIPC. If the broker itself goes bankrupt, each account can be protected up to US$500,000, of which a cash sub-limit is US$250,000. This insurance applies only to shares that are securities. If the trust's own bitcoin depreciates due to the bankruptcy of the custodian, it cannot be compensated, and there is no mechanism to insure the underlying bitcoin like deposit insurance protects bank cash.

Regulators have made a structural change: The U.S. Securities and Exchange Commission approved the physical creation and redemption of spot Bitcoin ETFs in 2025, reducing the need to sell bitcoins to meet cash redemptions. This improves operational efficiency but does not eliminate custody risks.

Centralization issues faced by the entire category

Centralization of hosting is not unique to IBIT. CoinShares CEO Jean-Marie Mognetti said at the conference that most issuers rely on a single custodian, which "creates a huge concentration risk in the market." He believes that diversified funds often spread custody among multiple prime broker-like relationships, rather than just one. However, custody arrangements have changed: Fidelity has entrusted its FBTC's bitcoins to its affiliated company Fidelity Digital Assets;VanEck's HODL initially used Gemini and later added Coinbase; BlackRock's IBIT pairs Anchorage with Coinbase; and Morgan Stanley's proposed Bitcoin ETF specifies Coinbase Custody to co-custody with BNY.

Common misunderstandings

Adding Anchorage as a secondary custodian is sometimes interpreted as BlackRock transferring Bitcoin from Coinbase. However, the report pointed out the opposite: BlackRock has no plans to transfer existing funds and can decide its own allocation ratio, which means that the actual allocation between the two custodians may not change at all. Another related misunderstanding is equating IBIT shares with holding segregated and insured bitcoin. The report's description of risk factors in the prospectus clearly states that shareholders hold beneficial interests in the trust rather than direct ownership of specific bitcoins; retail shareholders cannot directly redeem shares in exchange for bitcoins; and only authorized participants can create or redeem in bulk-so secondary market liquidity depends on these companies continuing to arbitrage prices.

What is not disclosed in this article

This article does not directly review any SEC documents. All statements about custody details and structure stem from news reports 'interpretation of the document rather than the document itself, so nuances or subsequent revisions may be omitted. Some of the information used in this article comes from reports dated July 17, 2026, and the relevant statement has been attributed accordingly. IBIT's current allocation of Bitcoin between Coinbase and Anchorage is not publicly disclosed in the available evidence and can be changed at any time by BlackRock. This article cannot give IBIT's single current asset management scale data: US$70.7 billion (data as of November 29, 2025) and US$48 billion (data as of July 15, 2026) are the results of different dates and different measurements, and are not interchangeable or averaged. The above-mentioned promoter bankruptcy and custodian bankruptcy scenarios stem from prospectus-style disclosures and external legal analysis. Since the launch of this type of product in January 2024, no major spot Bitcoin ETF promoter or main custodian has actually gone bankrupt, so these scenarios have not been tested in practice. Finally, the available evidence does not determine whether the risk language summarized is specific to IBIT's own prospectus or is a general synthesis of multiple issuer documents.

Source

Each of the above facts is attributed to one of these reports. If there are differences, they have been clearly pointed out in the article.