BlackRock says Bitcoin ETFs changed who can participate
Jay Jacobs, BlackRock’s head of U.S. equity ETFs, said on Anthony Pompliano’s podcast that the biggest effect of spot Bitcoin ETFs has been a broad expansion in participation, bringing individual investors, institutions, and financial advisers into the market through a format they can already use inside standard brokerage accounts.
The interview aired on Sept. 17, 2026, on The Pomp Podcast and ran for 50 minutes. Across the conversation, Jacobs discussed Bitcoin ETF adoption, the drop in Bitcoin volatility, BlackRock’s crypto product strategy, and the firm’s framework for AI-related ETFs.
Jacobs said that before ETFs, retail investors had to open accounts at digital asset exchanges, which created friction. For many institutions, direct access was effectively off limits. Advisers also faced a longer and more cumbersome process. With IBIT, he said, buying Bitcoin became much closer to buying an S&P 500 product in a brokerage account.
He added that the launch of IBIT changed the internal conversation at institutions. Before the product existed, advisers and institutions could avoid the topic because they could not buy it anyway. After IBIT, Bitcoin had to be discussed as a portfolio question: what kind of asset it is and whether it belongs in an allocation.
Bitcoin volatility has fallen from around 80% to 35%-40%
Pompliano noted during the interview that Bitcoin’s volatility has compressed sharply, from roughly 80% in the past to about 35%-40% now. Asked whether that shift could last, Jacobs said BlackRock does not claim to have a single definitive answer, but he pointed to several factors that have clearly contributed.
One is the buildout of ETPs and the options market around them. In his view, those products created more ways to participate and made the market deeper. That matters for both investors seeking liquidity and those running more complex strategies.
He also said the investor base has broadened. More participants, more research coverage, and a larger pool of long-term buyers have helped offset shorter-term trading activity. As participation rises and liquidity improves, volatility becomes easier to compress.
Pompliano referenced Jordi Visser’s idea of a “silent IPO,” describing Bitcoin over the past year or two as something like a company that quietly went public, with early holders transferring ownership to a new generation of investors through ETFs. He also said 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 capital has helped reduce volatility. But he said BlackRock does not believe Bitcoin’s core nature has changed.
He described Bitcoin as a global monetary alternative that remains decentralized, outside the control of any single government, and freely transferable across borders. Those traits, he said, still account for most of its value. Jacobs said, “When people worry about institutions, geopolitics, or fiat currency debasement, Bitcoin should benefit. In that kind of environment, stocks and bonds often do poorly.” In his view, the diversification case is still intact.
BlackRock is staying focused on Bitcoin and Ethereum
Pompliano framed crypto product strategy as three broad choices: stay out entirely, list everything, or go deep on a very small number of assets. Jacobs said BlackRock has chosen the third path, focusing on Bitcoin and Ethereum while building different structures around them.
His reasoning was straightforward. Bitcoin and Ethereum account for roughly two-thirds to three-quarters of total digital asset market capitalization, while adoption is still early. BlackRock’s approach, he said, is to go deep in the largest pools first.
Jacobs said IBIT is the world’s largest and most liquid Bitcoin ETP. On Ethereum, BlackRock already has ETHA, the non-staking version, and launched ETHB this year as a staking version designed to let investors access staking yield through an ETP structure.
He also discussed BIDA. The product sells covered calls on about 30% of its Bitcoin position to generate cash flow for investors. Jacobs said that design came directly from client feedback. Many investors like Bitcoin’s long-term thesis, he said, but Bitcoin itself offers no yield, which makes it harder to fit into portfolios built around income. Adding options income makes it easier for those investors to hold the asset.
Large holders want financialization more than custody
When the discussion turned to in-kind creation and redemption, Pompliano said he often hears that wealthy Bitcoin holders move into ETFs because of custody and security concerns, including cold wallet theft and physical security risks. He also noted that some hardline Bitcoin supporters see ETF ownership as contrary to Bitcoin’s ethos.
Jacobs said that when IBIT first launched, regulators did not allow in-kind creation and redemption, and that came later. He said his original assumption was similar: that security would be the main driver. In practice, he said, that turned out to be only part of the story.
According to Jacobs, the larger demand is financialization. Many long-term Bitcoin holders have a large share of their wealth tied up in the asset. They may want to buy a house or a car, and the ability to borrow against Bitcoin is a concrete need. Others want to add options-based protection or income strategies, or exchange part of their Bitcoin risk for S&P 500 exposure. Once Bitcoin sits inside an ETF wrapper such as IBIT, he said, the range of things investors can do with it expands materially.
He added that the threshold for in-kind creation and redemption has come down sharply and is now about $1.5 million per transaction, versus a much higher level before. That reduction, he said, has widened the eligible pool.
BlackRock now treats AI as a macro factor
The conversation also covered BlackRock’s AI framework. Pompliano noted that the firm’s midyear thematic report devoted substantial attention to AI. He said the market at one stage seemed to treat AI as a theme that had taken attention away from Bitcoin, but that both now appear to be back on the same table.
Jacobs said BlackRock began treating AI as a macro factor several months ago. In the past, investors focused on variables such as GDP and interest rates. Now, he said, AI adoption belongs in the same category. 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 also argued that viewing AI only as a technology theme is outdated. AI is also a healthcare theme, a legal theme, and a consumer theme. It touches nearly every industry. Buying a sector fund, in his view, does not mean an investor has avoided AI exposure.
The biggest AI mismatch is in mines and fabs
Jacobs said BlackRock has built an AI value-chain framework that spans utilities, 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. Large models can keep improving around the clock, and companies around the world can decide within days or weeks to increase AI spending. Demand is growing exponentially. Supply is not.
He gave several examples. A copper mine can take 4 to 8 years from development to production, while data centers and grid rebuilds are constrained by copper. If optical interconnects replace copper interconnects, that shifts demand toward indium, which is a byproduct of zinc mining and still tied to long mining cycles. Even if the need is simply more GPUs, a chip fab takes about 4 years to come online.
His conclusion was blunt: in AI, demand is measured in days, while supply is measured in years.
How BlackRock decides how far to slice an ETF theme
Asked how granular ETF products can become, Jacobs said BlackRock uses three tests.
- First, the product has to solve a real client need, especially where the exposure is hard for clients to reach directly or needs to be defined by the issuer.
- Second, there has to be a positive expected return. Packaging together assets that are not worth owning does not create value.
- Third, the result has to be a high-quality ETF. If a theme is sliced so narrowly that only two or three names remain, he said, it stops looking like an ETF and becomes just a tiny basket of stocks.
That logic shapes BlackRock’s 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 exposure themselves can buy by segment, including PWR for power, IDGT for data center real estate, and ICOP for copper miners.
There are now more ETFs in the U.S. than listed stocks
Jacobs said the ETF business itself has become harder to navigate. The number of ETFs in the U.S. now exceeds the number of listed stocks, he said, and this year has already set another issuance record. Active ETFs have also surpassed index ETFs in number.
That leaves investors with too many choices, and names can be misleading. 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 tradeoff is that investors receive a K-1 tax form, which is more cumbersome, but Jacobs said the after-tax efficiency is better. BlackRock knowingly chose the more complex route and then spent time explaining why.
He also pointed to trading quality. BlackRock does not make markets itself, but it considers market-maker needs when designing products. Two ETFs may look similar by name, he said, yet the one backed by a deeper market-maker ecosystem is likely to offer a better trading experience when markets are volatile and liquidity tightens.
His advice was simple: do not judge an ETF by its name alone.
Advisers are now serving two generations with different product lists
In the final part of the interview, Pompliano said data from his own wealth platform shows that client assets are still dominated by stocks, with about 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 concentrated than the narrative suggests.
Jacobs said that matches what BlackRock sees. He described millennials as the first digitally native generation, though not fully native to social media, while Gen Z grew up inside social media and Generation Alpha will likely encounter finance in ways very different from their parents.
He said that shift is already changing the advisory business. Advisers now have to serve two generations at once. Baby boomer clients ask about large-cap growth funds, while their children ask about Bitcoin funds. One reason IBIT has been so successful, he said, is that advisers realized the product list for those two generations is no longer the same, and they need a way to bridge that gap.
Jacobs also pointed to the coming transfer of wealth from baby boomers to millennials.
Even so, he said the core principles of portfolio management do not change across generations. The basic relationship between risk and return is the same. What changes are the tools and the asset classes. The adviser’s job, in his view, is to keep the discipline of managing money while learning how to speak to each generation in terms it understands.