Bitcoin’s volatility has compressed from roughly 80 to the 35–40 range, according to BlackRock’s U.S. Head of Equity ETFs Jay Jacobs — and the world’s largest asset manager says that shift is turning Bitcoin ETFs from a speculative bet into something closer to a financial tool for large holders.
By Ana Gonzalez | September 20, 2026
The Hook: From Get-Rich-Quick to Collateral
In a September 17 interview on The Pomp Podcast, host Anthony Pompliano described Bitcoin as having moved from roughly 80 volatility to 35–40 — a measure of how wildly the price swings over a year. Jacobs, who oversees the iShares Bitcoin Trust (IBIT), did not attribute the decline to a single cause. In his view, exchange-traded products, a growing options market, deeper liquidity and an expanding base of long-term holders all contributed.
Why should a regular investor care? Because volatility is the number Wall Street risk models run on. A volatile asset is hard to hold with borrowed money, hard to use as collateral and hard to put in a pension-style portfolio. A calmer asset is not. Bitcoin is trading around 81,237 USD as of this writing, and the falling swings around that price are quietly changing who is allowed to buy it.
On-Chain Evidence: The ETF Wrapper’s Real Superpower
Jacobs said BlackRock initially expected institutional custody to be the main reason long-term holders would move Bitcoin into an ETF structure. Client conversations revealed something else: putting Bitcoin exposure inside conventional financial accounts makes it easier to use that wealth in lending and derivatives markets. Imagine owning a house worth a fortune but having no way to borrow against it — the ETF wrapper is the mortgage office for Bitcoin wealth.
Holders with a large share of their net worth in Bitcoin sometimes want liquidity for a property, a vehicle or other spending without selling their position, Jacobs explained. An ETF share can potentially be pledged to lenders that accept it as collateral, while options can hedge risk or generate income. Importantly, IBIT itself does not make loans — a bank or broker decides whether to accept the shares and on what terms. JPMorgan has already moved digital assets further into its secured-lending framework, including crypto-linked ETFs.
- IBIT’s creation basket now sits at roughly 1.73 million USD (22.65 BTC) as of September 17, down substantially from earlier levels; Jacobs described the practical threshold as about 1.5 million USD.
- In-kind creations and redemptions have been permitted for authorized crypto ETP participants since the SEC’s July 2025 approval — SEC Chairman Paul Atkins said the change could make the products “less costly and more efficient.”
- BlackRock’s crypto lineup now spans IBIT, ETHA, ETHB and BITA across spot, staking and income strategies.
The Core Conflict: Lower Volatility, Lower Thrills
There is a trade-off. The same deepening institutional participation that calms Bitcoin’s price also mutes the explosive moves that made earlier cycles famous. Jacobs characterized the ability to plug Bitcoin into traditional lending, hedging and portfolio tools as the asset’s financialization — a word that excites pension funds and bores degens. His view on where volatility goes from here remains an assessment, not a promise.
And a reality check for smaller investors: in-kind redemption does not mean you can walk into BlackRock and swap a little Bitcoin for IBIT shares. Creation and redemption happen through authorized participants moving large baskets — the roughly 1.73 million USD kind.
Market Implications: The Maturation Trade
If volatility in the 35–40 range holds, expect more allocation models to accept Bitcoin at higher weights, more lenders to accept IBIT as collateral, and more options strategies built around the fund. Each of those adds structural demand that did not exist when Bitcoin was an 80-volatility asset. The flip risk: volatility is mean-reverting by nature, and one macro shock can send it right back up.
The Verdict
BlackRock is telling the market that Bitcoin has grown up — slower swings, deeper markets, and a role in portfolios as collateral and a diversifier rather than a lottery ticket. For long-term holders, that is the thesis working. For thrill-seekers, the casino is getting quieter. Either way, when the world’s largest asset manager starts using the word “collateral,” it is institutional positioning language — and it deserves your attention.
The cryptocurrency market remains highly volatile. This article is for informational purposes only and does not constitute financial advice.
80 down to 35-40 vol while price holds 81k. jacobs is right, you cant collateralize something that swings 80 a year. the boring phase is the institutional phase
Exactly. The options market deserves most of the credit here. Dealers hedging puts and calls naturally dampen the swings, same thing that happened with SPY
SPY took a decade because option listings rolled out slowly. btc went from zero listings to everywhere in two years, so dealer hedging compressed the swings on fast forward
spy took decades of dealer hedging to chill out. btc options are only two years deep, the vol floor probably settles even lower from here
two years of listed options and vol is already this calm, dealer flows compound fast. spy took a decade because listings rolled out slowly, btc went from zero to everywhere in one cycle
and every new listing adds another hedging lane. dealer gamma compounding is the quiet vol killer nobody charts
Two years from first listing to half the vol, that pace has no equity precedent. If the compression keeps this slope the collateral pitch writes itself.
funny how nobody wanted btc at 20k with 80 vol but everyone wants it at 80k with 35 vol. wall street just waited for bitcoin to calm down before showing up
im old enough to remember blackrock calling btc speculative in every sec letter. 80 to 35 vol later its collateral. sure
the fun part is the etf wrapper did the opposite of what the old guard feared. wall street showed up and the vol got domesticated, funny how that order worked out
vol halved and the pitch went from speculation to collateral in one cycle. jacobs is describing plumbing now, and nobody at blackrock talks like that without a product roadmap behind it
vol going from 80 to 35-40 and suddenly blackrock is out here pitching BTC as collateral. funny how the pitch changes when there is an ETF to sell
the pitch changes when the product changes. collateral desks need calm vol the way etf sales need hype, blackrock just follows the wrapper
BlackRock follows the fee machine, always has. IBIT gathering assets is why Jacobs suddenly talks like a repo desk. Nothing deeper than that.
the fee machine point is the real read. IBIT at those aum levels prints management revenue regardless of who borrows against it. the collateral pitch is just the next sales layer
The house with no mortgage office analogy is actually a decent way to explain it. ETF wrapper lets you borrow against the position instead of selling. That is a real unlock for large holders.
borrow against it instead of selling is the real point, but desks will still demand heavy haircuts until vol sits under SPY for a full year
borrow against it instead of selling is the line that ends every diamond hands argument. nobody sells the house to buy groceries either
the analogy works but the part nobody says out loud is the tax angle. borrow against the ETF and you never trigger a sale, the wrapper is a deferral machine as much as a lending one
hmm 35-40 vol is still spicier than most equities tbh. great for a sleeve position, terrifying as loan collateral if a drawdown hits
calmer than a lot of small caps funds already hold on margin though. the haircut does the work, not the vol number itself
haircut plus ltv caps do most of the work, lenders accepted warehouse receipts for centuries. raw vol is a vibe metric by comparison
35 to 40 vol is spicier than large cap equity but calmer than plenty of small caps lenders already accept on margin. haircut plus ltv caps do the rest
thats why the haircut exists. 35 vol collateral at 50 percent ltv is still safer for a lender than most small cap equity was pre 2008
Exactly. Lenders will haircut it hard for that reason. Still, Jacobs admitting the use case shifted from speculation to plumbing is notable coming from BlackRock.
spicier than equities sure, but at a 5 percent sleeve weight the swing math works fine. jacobs point is the vol only matters relative to allocation size, pensions were never gonna yolo 100 percent in
vol cut in half and suddenly the pitch is borrow against your coins. the etf era turned btc from casino chip into collateral, weird timeline