BlackRock Sees Bitcoin Volatility Drop Amid Increased Market Participation
BlackRock's U.S. Head of Equity ETFs, Jay Jacobs, recently stated that Bitcoin volatility has decreased to the 35-40 range amid participation in the market. This significant reduction in volatility is attributed to various factors, including ETPs (exchange-traded products), options, deeper liquidity, and an expanding base of long-term holders.
Jacobs emphasized that large Bitcoin holders are increasingly using ETFs as financial tools for collateral, options access, and portfolio flexibility. He noted that these investors prefer ETF wrappers because shares can support collateralized borrowing, allowing them to connect their Bitcoin wealth with traditional lending, hedging, and portfolio tools.
BlackRock has seen a significant increase in the use of its iShares Bitcoin Trust ETF (IBIT) as a financial tool for large holders. Jacobs stated that the practical threshold for creating an IBIT basket is approximately $1.5 million, which is lower than earlier levels. The current creation basket for IBIT is worth about $1.7 million and contains 22.65 BTC.
Jacobs attributed the decline in volatility to a combination of factors, including ETPs, options, deeper liquidity, and an expanding base of long-term holders. He noted that more investors are now holding Bitcoin strategically, providing a different source of demand from shorter-duration traders.