BlackRock cites financialization as key driver for Bitcoin ETFs

BlackRock originally assumed that what big investors really wanted was a safe place to store their Bitcoin. Turns out, they wanted something far more ambitious: the ability to use Bitcoin the same way they use every other financial asset.

Jay Jacobs, a BlackRock executive, explained in a recent podcast interview that the primary force pulling Bitcoin into ETF wrappers isn't security. It's financialization, the process of turning an asset into something that can be collateralized, optioned, lent against, and generally plugged into the plumbing of traditional finance.

When the iShares Bitcoin ETF (IBIT) launched in January 2024, BlackRock's working theory was straightforward. Institutions wanted institutional-grade custody, a professional vault for a notoriously tricky-to-store asset.

What actually happened was that large Bitcoin holders started converting their direct holdings into spot Bitcoin ETF shares through in-kind creations and redemptions. By late 2025, over $3 billion in conversions had flowed through that mechanism alone.

The reason is practical. An ETF share sits inside brokerage accounts, qualifies as loan collateral, and slots neatly into portfolio management systems. Raw Bitcoin does none of those things without significant custom infrastructure.