BlackRock Confirmed Bitcoin Is Here To Stay | Jay Jacobs

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The Pomp Podcast 50 min 1 speaker 8 chapters transcribed just now
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How have Bitcoin ETFs changed the way investors can access Bitcoin?

Jay Jacobs 0:00
When we end up in an environment where people are more concerned about institutions, concerned about geopolitics, concerned about uh fiat currency, maybe uh uh debasement, bitcoin should benefit. That's also an environment where stocks and bonds tend to generally not do so well.

Why has Bitcoin’s volatility compressed since the launch of the ETFs?

Jay Jacobs 0:15
So that fundamental diversifying nature of Bitcoin, we believe still very much holds, uh, even as the investor base has maybe shifted over the last few years.

What is BlackRock’s product strategy for Bitcoin and other crypto assets?

Anthony Pompliano 0:23
What's going on, guys?

How do in‑kind redemptions and borrowing against Bitcoin work for investors?

Anthony Pompliano 0:24
We got a great conversation today with Jay Jacobs.

Why is AI considered a new macro‑economic factor for markets?

Anthony Pompliano 0:26
He is the US head of equity ETFs at BlackRock.

What are the differences between active and passive investing in AI and crypto?

Anthony Pompliano 0:29
He's one of the big dogs who has brought ETFs into the industry.

How is the rise of independent investors reshaping the ETF landscape?

Anthony Pompliano 0:32
They obviously are the iBit owners and they've brought that to the market, done a fantastic job.

What advantages do ETFs have over mutual funds for modern investors?

Anthony Pompliano 0:36
But in this conversation, we talk about Bitcoin, the crypto market, what's going on, why are people allocating to these structures? On top of that, we talk about AI, all the infrastructure, the entire value chain, what they think about the next leg of AI, and how investors are actually allocating their capital. I think this conversation is really interesting because it's going to help you better understand not only these themes, these technologies, and these opportunities, but it's also a little bit as to why ETFs have risen so quickly, why they've become so popular in people's portfolio. And I think if you listen to the entire thing, not only will you walk away and be impressed by Jay, but I also think that you're going to find a lot of opportunities to go and investigate and maybe put into your portfolio.
Anthony Pompliano 1:09
So here's my conversation with Jay Jacobs. All right, Jay, uh the Bitcoin ETFs are the most successful ETF product ever launched, it seems. Um, you guys were a pioneer. I remember when you guys filed for the ETF, I said, we're gonna get it approved, and uh that's probably gonna be a pretty big deal for the industry. When you look back now, what has been the actual measurable impact on the Bitcoin industry from these ETFs?
Jay Jacobs 1:30
I think the biggest impact has just been the amount of people that can now participate in the Bitcoin ecosystem. So if you think about before these ETFs existed, uh people had to go sign up on a digital asset exchange. That was a friction for many individuals, that was a prohibition for many institutions that didn't have that ability, or just an incredibly long and arduous process for even many financial advisors or RAAs that had the ability to. Do that and set up all the plumbing for digital asset exchanges, but just they weren't there yet from a conviction behind Bitcoin perspective. So once the Bitcoin ETPs like iBit came out, it just made it as easy to access as clicking a button on a brokerage account, just like you buy the SP 500 or buy an individual stock.
Jay Jacobs 2:13
And so what that meant was individual investors, so many more had access to uh vehicle tracking Bitcoin. Financial advisors over time got access because we saw a lot of financial advisor platforms approve iBit and frankly approve Ether or Ethereum ETF as well. And institutions now suddenly had a very liquid vehicle to express their views as well. So it increased access. Um, what I think it also did was before iBit, many advisors and institutions could kind of avoid the Bitcoin. Conversation. Like they it was like I can't ignore it. Yeah, they they couldn't buy it. So you know, everyone has so much on their plate at all times in these institutions. So are you gonna spend time learning about Bitcoin or you're gonna spend time thinking about like your asset allocation between stocks and bonds?
Jay Jacobs 2:59
I think a lot of them focused on the latter. Once exposure to Bitcoin became available to them with iBit. It had to be part of the conversation of how do they think about this asset class? Does it fit in their portfolio? What are they getting when they allocate to Bitcoin in a broader portfolio? And so it just really accelerated those conversations within some of the most sophisticated institutions in the world.
Anthony Pompliano 3:19
It seems like Bitcoin's volatility has compressed. It was, you know, 80-ish vol asset.

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