Bitcoin volatility has shrunk sharply to the 35-40 range from previously sitting around 80. Jay Jacobs, BlackRock’s Head of US Equity ETFs, revealed the volatility data details during an interview on the Pomp podcast on September 17, 2026.
The reduction in price swings has been driven by a combination of multiple factors. The advent of ETFs, options trading, deeper market liquidity, and an expanding base of long-term holders have made the asset’s price action increasingly stable. Jacobs noted that the decline in volatility is not the result of a single factor, but rather the cumulative maturation of the crypto market.
However, this price stability has unlocked a new utility - banking collateral.
More Than Just Institutional Custody
Large-scale Bitcoin holders are starting to shift their coins into the IBIT ETF structure. According to Jacobs, this move is not merely about seeking institutional-grade custody. Capital allocators are targeting another utility: using their ETF positions as collateral in conventional lending and derivatives markets.
Through the ETF wrapper, wealth tied up in Bitcoin can be directly collateralized. Investors can secure cash loans to purchase homes, vehicles, or real estate without having to liquidate their holdings. This satisfies immediate liquidity needs for real-world assets while keeping their Bitcoin stack intact.
JPMorgan has already moved to capitalize on this hybrid financing trend. The global banking giant now accepts Bitcoin as collateral, expanding its secured lending framework to include digital assets after previously only processing crypto-related ETFs.
Who Sets the Terms?
Despite collateral avenues opening up, BlackRock emphasized that IBIT does not directly issue mortgages or auto loans. The asset manager also does not guarantee that every investor can automatically unlock cash using IBIT shares.
The final decision rests entirely with banks, brokerages, or traditional lending institutions. These creditors determine whether ETF shares qualify as eligible collateral, setting the corresponding terms and interest rates. BlackRock merely provides the standard investment product, while credit underwriting depends strictly on individual bank policies.
An Extra Layer of Portfolio Protection
BlackRock itself continues to expand its Bitcoin and Ethereum product suite to meet market demand. The introduction of options on spot Bitcoin ETFs rounds out this market infrastructure, providing investors with additional instruments to hedge downside risk or generate yield.
For long-term holders, this bridge between crypto and traditional banking offers a practical solution. Real-world capital expenditures can now be funded via conventional credit lines backed by ETF collateral, leaving core crypto holdings untouched to capture future upside potential.
Source: crypto.news.
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Disclaimer: This article is for informational and educational purposes only, not financial advice. Cryptocurrency assets are highly volatile and carry significant risk. Always do your own research (DYOR) and never invest more than you can afford to lose.
