The narrative around Bitcoin ETFs has always assumed one direction of travel: traditional investors cautiously entering crypto through a familiar wrapper. BlackRock's Jay Jacobs, US head of equity ETFs, is describing something more interesting — a two-way street, where crypto natives are entering the broader ETF ecosystem through Bitcoin and then staying.
"IBIT was a way for traditional investors to now get into digital assets. But we have seen a lot of people really kind of enter into IBIT, starting with digital asset ETPs," Jacobs told Cointelegraph on the Chain Reaction podcast Thursday. Around three-quarters of IBIT investors had never owned an ETF before the Bitcoin product launched — meaning BlackRock's $48 billion flagship crypto fund has been as much an on-ramp for crypto investors into traditional finance as it has been the reverse.
The behavioral pattern: Bitcoin first, then S&P 500
Once investors get exposure to IBIT, Jacobs said many start buying other BlackRock funds — including the S&P 500 tracker IVV, the artificial intelligence fund BAI, and the gold ETF IAU. The sequencing is striking: Bitcoin as the entry point, traditional asset classes as the follow-on. "We absolutely see it as this is a way to engage with a different group of people than maybe we've engaged with in the past," Jacobs said.
IBIT, launched in January 2024, currently holds 765,936 BTC with $48 billion in assets under management — making it the largest spot Bitcoin ETF globally and, based on Jacobs' behavioral data, one of the most effective financial product on-ramps ever created for a previously underserved investor demographic.
BlackRock also launched its newest Bitcoin product on Wednesday — the iShares Bitcoin Premium Income ETF (BITA) — which generates income by selling covered call options on Bitcoin holdings, adding a yield-generating dimension to its crypto product suite that directly addresses income-oriented investors who had limited reason to own Bitcoin exposure previously.
The "Great Convergence": TradFi and DeFi, not TradFi versus DeFi
The behavioral shift Jacobs describes fits within a broader framework BlackRock is calling the "Great Convergence" — the accelerating overlap between crypto, decentralized finance, and traditional finance that is dissolving the boundaries that have historically separated them.
"Historically, you've seen a lot of different assets held separately — DeFi versus TradFi, actively managed funds versus index funds, private assets versus publicly listed assets," Jacobs said. "And what's happening is people are looking for more solutions to manage their portfolios."
His framing of where this leads is specific: "I think you're gonna hear a lot less about versus — TradFi versus DeFi — and I think you're gonna see a lot more ampersands. It's TradFi and DeFi."
The convergence is visible across multiple dimensions simultaneously. Tokenized real-world assets have surged 589% since early 2025 according to Binance Research. The Clearing House — backed by JPMorgan, Citibank, Bank of America, BNY, and Wells Fargo — is building a tokenized deposit network to compete with stablecoins. VanEck launched the first US spot BNB ETF. Kraken launched regulated perpetual futures for US clients. Standard Chartered's Kendrick initiated coverage on UNI with a $100 price target based on RWA flows into DeFi. The distinction between "crypto" and "finance" is narrowing at every level of the market simultaneously.
Pre-IPO perps: the convergence in practice
The most vivid recent example of the Great Convergence in action was the SpaceX IPO — where crypto traders accessed pre-IPO exposure through perpetual futures and tokenized stocks on crypto exchanges before the company began trading on Nasdaq. Pre-IPO perpetual futures volumes have surged from approximately $1 billion in early May to about $22 billion, according to CryptoQuant data — with Binance establishing itself as the largest venue for the product category.
The VELVET token's 1,400% weekly surge on SpaceX pre-IPO exposure narrative — and its subsequent sell-the-news risk after listing — illustrated both the appetite for and the fragility of this convergence in its early stages. But the direction of travel is clear: crypto infrastructure is increasingly serving as the primary venue for financial products and risk exposures that would previously have required traditional finance participation.
Why this matters during the current correction
Jacobs' data provides important context for understanding the ETF outflow dynamics that have dominated this analysis throughout May and June. The $5.72 billion in IBIT and broader Bitcoin ETF redemptions since the April CPI shock represented institutional and retail investors making macro-driven decisions to reduce risk exposure — the same decisions they would make with any financial product during a period of elevated inflation, hawkish Fed communication, and geopolitical uncertainty.
But the underlying behavioral finding — that 75% of IBIT investors had never owned an ETF before, and many subsequently expanded into S&P 500, AI, and gold exposure — suggests that the long-term structural demand being built through IBIT is not simply Bitcoin demand. It is a new investor cohort being introduced to portfolio construction for the first time, with Bitcoin as the entry point. That cohort, once introduced to the broader ETF ecosystem, is unlikely to disappear even during extended crypto bear markets — which may be why BlackRock has consistently maintained its crypto product development pace including BITA's Wednesday launch despite the sustained outflow environment.
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