Bitcoin’s volatility has dropped from roughly 80 to around 35-40, and BlackRock executive Jay Jacobs said the compression appears structural, tied to the rise of ETFs, options markets around ETPs, and a broader base of long-term buyers.
Speaking on Anthony Pompliano’s podcast released on Sept. 17, Jacobs said Bitcoin’s core character has not changed even as market structure has. He said, 「People should benefit from Bitcoin when they worry about institutions, geopolitics, or fiat debasement. In those environments, stocks and bonds often do poorly.」
IBIT pushed Bitcoin into mainstream portfolio discussions
Pompliano framed the spot Bitcoin ETF launch as one of the most successful ETF rollouts ever and asked what the most measurable industry impact had been.
Jacobs pointed first to access. Before ETFs, retail investors had to open accounts at digital-asset exchanges. For many institutions, that route was effectively off limits. For financial advisors, the process was cumbersome. After IBIT launched, buying Bitcoin became much closer to buying an S&P 500 product inside a brokerage account.
He said the more important shift may have been forcing the conversation. Before IBIT, advisors and institutions could avoid the topic because they could not buy the asset in that format anyway. Once IBIT existed, Bitcoin had to be discussed as part of asset allocation: what kind of asset it is, and whether it belongs in a portfolio. Jacobs said those internal conversations accelerated sharply among some of the world’s most demanding institutions.
Why volatility fell from about 80 to 35-40
Pompliano noted that market participants have offered several explanations for Bitcoin’s lower volatility, including Wall Street participation, ETF adoption, and the growth of leverage and options.
Jacobs said BlackRock does not claim to have a single answer, but he pointed to several contributors. One is the buildout of ETPs and options markets around them, which has created more ways to participate and improved the market’s ability to absorb liquidity demand and more complex trading activity. Another is the increase in the number of participants, the amount of research, and the pool of long-term buyers, which can offset shorter-term trading flows. In his telling, more participants and better liquidity make lower volatility easier to sustain.
Pompliano also brought up Jordi Visser’s idea of a “silent IPO,” describing Bitcoin over the past year or two as an asset quietly going public, with early holders transferring exposure to a new generation of owners through ETFs. He added that Bitcoin now appears more sensitive to interest rates and more correlated with some other assets.
Jacobs agreed that the holder base has changed and that more long-term buy-and-hold money has helped compress volatility. He did not agree that Bitcoin’s basic nature has changed. He described it as a global monetary alternative: decentralized, not controlled by any one government, and able to move across borders freely. That, he said, still accounts for most of its value and preserves its diversification role.
BlackRock’s crypto product line stays focused on Bitcoin and Ethereum
Pompliano said crypto product builders generally face three paths: stay out entirely, list everything, or go deep on a very small number of assets. He said BlackRock had chosen the third route.
Jacobs said the starting point is simple. Bitcoin and Ethereum account for roughly two-thirds to three-quarters of total digital-asset market capitalization, while adoption remains early. For that reason, BlackRock has chosen to focus on the largest pools first.
He said IBIT is the world’s largest and most liquid Bitcoin ETP. On Ethereum, BlackRock offers ETHA as the non-staking version and launched ETHB in 2026 as a staking-enabled product that lets investors access staking yield through an ETP structure.
He also discussed BIDA, which sells covered calls on about 30% of its Bitcoin position to create cash flow for investors. Jacobs said the product came directly from client feedback. Many investors like Bitcoin’s long-term case, but because it produces no interest or income on its own, it can be awkward inside portfolios built around cash flow. Adding options income makes the position easier for some investors to hold.
Large holders want financialization, not just custody protection
Pompliano asked about in-kind creation and redemption and whether wealthy Bitcoin holders were moving into ETFs mainly because of security concerns such as cold-wallet theft or personal safety risks tied to self-custody.
Jacobs said that when IBIT first launched, regulators did not allow in-kind creation and redemption, but that later changed. He said he initially expected security to be the main driver too. After talking with clients, he came away with a different view: security matters, but the bigger demand is financialization.
His argument was practical. Many long-term holders have a large share of their wealth in Bitcoin. When they want to buy a house or a car, borrowing against that exposure becomes a real need. Others want to add options-based protection or income strategies, or swap part of their Bitcoin risk for S&P 500 exposure. Once Bitcoin sits inside the IBIT wrapper, he said, investors can do far more with it.
Jacobs said the threshold for in-kind creation and redemption has come down sharply and now sits at about $1.5 million per transaction, much lower than before. That, in his words, has widened the pool of eligible participants.
BlackRock now treats AI as a macro factor
The conversation later turned to AI. Pompliano noted that BlackRock’s midyear thematic report devoted substantial attention to the sector, after a period when some investors felt AI had overshadowed Bitcoin.
Jacobs said BlackRock began treating AI as a macro factor several months ago. In his description, AI adoption now sits in the same tier as GDP and interest rates when thinking about markets. If AI slows, markets feel it. If AI accelerates, markets benefit. For the overall pricing of the U.S. market, he said, AI has become that important.
He added that viewing AI only as a technology theme is outdated. It is also a healthcare theme, a legal theme, and a consumer theme, touching nearly every industry. Buying a healthcare fund, in his view, does not mean an investor has sidestepped AI exposure.
The AI mismatch: demand moves in days, supply moves in years
Jacobs said BlackRock has built an AI value-chain framework that spans power companies, data-center real estate, chip manufacturing, data owners, large-model developers, the application layer, and the platform layer, with dozens of companies globally spread across those segments.
He said the biggest mismatch in AI today is the speed gap between demand and supply. On the demand side, large models can keep improving around the clock, and companies around the world can decide within days or weeks to increase AI spending. Demand, he said, is growing exponentially.
Supply moves much more slowly. A copper mine can take four to eight years from development to production. If optical interconnects replace copper interconnects, indium becomes important, and indium is a byproduct of zinc mining, which still leaves supply tied to multi-year mining cycles. Even if the need is simply more GPUs, a chip fab takes about four years to come online. Jacobs summed it up this way: demand is measured in days, supply in years.
How BlackRock decides how far an ETF theme can be sliced
When Pompliano asked how granular ETF products can become, Jacobs laid out three tests.
- First, the product has to solve a real client need and offer exposure clients cannot easily reach on their own, or exposure that needs to be clearly defined.
- Second, it has to carry a positive expected return. Packaging together assets that are not worth owning does not create value.
- Third, it has to work as a high-quality ETF. If a sub-theme narrows down to only two or three names, it stops looking like an ETF and starts looking like a tiny stock basket.
Using that framework, Jacobs described BlackRock’s AI lineup. Investors who want a simpler route can buy BAI, an actively managed AI ETF run by Tony Kim, who rotates across the value chain. Investors who want to build exposures themselves can buy by segment: PWR for power, IDGT for data-center real estate, and ICOP for copper miners.
Too many ETFs, and names can mislead investors
Jacobs said investor education remains an unfinished job. He also pointed to a broader industry problem: the number of ETFs in the U.S. now exceeds the number of listed stocks, 2026 has been a record year for ETF launches, and active ETFs have already surpassed index ETFs in count.
That leaves investors with too many choices, not too few. Many funds sound like AI ETFs or power-infrastructure ETFs, but once investors look under the hood, the holdings and product design can be very different.
He used BIDA as an example. BlackRock chose a Securities Act of 1933 structure rather than an Investment Company Act of 1940 structure. The 1933 structure is also used for Bitcoin and gold ETFs. The trade-off is that investors receive a K-1 tax form, which is more cumbersome, but Jacobs said the after-tax efficiency is better. BlackRock chose the more complex route knowingly, then spent time explaining why.
He also said that while BlackRock does not act as a market maker, it thinks about market-maker needs when designing products. Two ETFs may sound similar, but if one has a much deeper market-maker ecosystem behind it, that fund is more likely to trade better when markets are volatile and liquidity is tight. His advice was blunt: do not judge an ETF by its name alone.
A generational shift is changing advisor conversations
Near the end of the interview, Pompliano shared data from his own wealth platform, saying client assets are still dominated by stocks, with roughly 20% in owner-occupied real estate and only 10% in crypto. Even among an audience closely tied to crypto, he said, actual allocations are less extreme than the narrative suggests.
Jacobs said that matches what BlackRock sees. He described millennials as the first technology-native generation, though not one born fully into social media. Gen Z, by contrast, grew up inside social platforms, and the Alpha generation will encounter finance in ways that differ sharply from their parents.
That shift is already changing advisory work. Jacobs said advisors now have to serve two generations at once. Baby boomers ask about large-cap growth funds. Their children ask about Bitcoin funds. One reason IBIT became so successful, he said, is that advisors realized the product list for those two conversations is no longer the same, and they need to bridge that gap. He added that the coming transfer of wealth from baby boomers to millennials will make the shift even more visible.
At the same time, he said the basic principles of portfolio management have not changed across generations. The logic of risk and return is still the same. What has changed is the set of tools and asset classes, and advisors now need to speak to each generation in terms it understands.