---
title: "IBIT sells bitcoin to pay its fee, and ordinary shareholders cannot take the coins out"
url: "https://etf.net/news/ibit-sells-bitcoin-holders-cannot-redeem-2026-10-21"
published_at: "2026-10-21T16:30:44.126Z"
updated_at: "2026-10-21T16:30:44.126Z"
byline: "ETF.net Research"
---

# IBIT sells bitcoin to pay its fee, and ordinary shareholders cannot take the coins out

Only a broker-dealer, in a basket of 40,000 shares, can redeem shares for bitcoin, and a U.S. owner can owe tax on the sales that pay the fee.

By ETF.net Research. Published Oct 21, 2026.

BlackRock's iShares Bitcoin Trust ETF, IBIT, holds bitcoin. A shareholder's way out is to sell the share, which has traded on Nasdaq since Jan. 11, 2024. Over the 20 sessions through Oct. 20, 2026, an average of $1.72 billion of shares changed hands a day.

The trust's [quarterly report](https://www.sec.gov/Archives/edgar/data/1980994/000143774926026004/bit20260630c_10q.htm) for the period ended June 30, 2026, says Coinbase Custody Trust Company holds the bitcoin for the trust. On Oct. 20, 2026, BlackRock's [product page](https://www.ishares.com/us/products/333011/ishares-bitcoin-trust-etf) reported $66.86 billion in net assets.

## Ordinary shares cannot be redeemed for bitcoin

The share itself cannot be turned in for bitcoin. Only an authorized participant, a broker-dealer with a contract with the trust's sponsor and the trustee, can create or redeem shares, and only in a basket of 40,000.

The basket can be settled in bitcoin or in cash. When it is settled in bitcoin, the filings call that in-kind. An ordinary shareholder cannot ask for either.

## The fee is paid by selling bitcoin

The sponsor, an iShares affiliate of BlackRock, charges **0.25%** of the trust's net asset value a year, accrued daily.

The quarterly report says the trust seeks to reflect generally the performance of the price of bitcoin, before expenses and liabilities. It also says the trust does not do anything designed to profit from a change in that price, or to soften the loss if the price falls.

The [prospectus](https://www.ishares.com/us/literature/prospectus/p-ishares-bitcoin-trust-12-31.pdf) says:

"The amount of bitcoin represented by each Share will decrease over the life of the Trust due to the sales of bitcoin necessary to pay the Sponsor's Fee and other Trust expenses."

On Oct. 20, 2026, the product page put a 40,000-share basket at 22.64 bitcoin, which comes to 0.000566 bitcoin a share. As of June 25, 2025, the prospectus had put that basket at 22.72 bitcoin.

The prospectus assumes the trust is a grantor trust for U.S. federal income tax purposes, so a sale of bitcoin to pay expenses generally will be a taxable event for shareholders.

The product page lists no distribution. The [annual report](https://www.ishares.com/us/literature/annual-filings/ibit-1231.pdf) for 2025 says a sale of bitcoin to pay the fee can produce a taxable gain that is not associated with a distribution to shareholders. A U.S. owner can owe tax and receive no cash.

Source: etf.net, https://etf.net/news/ibit-sells-bitcoin-holders-cannot-redeem-2026-10-21. Please cite the page URL.