[Bloomberg ETF Analyst: Bitcoin-to-ETF Share Conversion Only Defers Taxable Gains, Not Tax Avoidance] Bloomberg Senior ETF Analyst Eric Balchunas stated that when Bitcoin is converted into physical shares of a spot Bitcoin ETF, investors do not immediately recognize capital gains, but the original cost basis and holding period are carried forward. Essentially, this is merely a deferral of taxes, not tax avoidance. This mechanism can also be used in reverse to convert ETF shares back into Bitcoin. Balchunas noted that this treatment applies to grantor trust structures, not open-end funds. Tax expert Clinton Donnelly added that the current tax stance suggests that contributing physical Bitcoin to an IBIT generally does not constitute a taxable event, but this judgment relies on the grantor trust treatment of the IBIT. The IRS has yet to issue a formal ruling on this matter.