A system and method of creating a snapclone for on-line point-in-time complete backup in a virtualized storage system is disclosed. In one embodiment, a method for creating a snapclone for on-line point-in-time complete backup in a virtualized storage system includes receiving a copy operation directed to one or more identified segments of an original virtual disk, in response to the copy operation, substantially sequentially copying the one or more identified segments to a snapclone virtual disk, clearing bits in an in-memory sharing bitmap associated with already copied one or more identified segments, and writing the cleared bits in the in-memory sharing bitmap to a disk resident virtual disk metadata associated with the snapclone virtual disk upon receiving a current write I/O operation while the copy operation is in progress. The received current write I/O operation is targeting data outside the LBA range of the already copied one or more identified segments.