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BlackRock is closing in on the crown of running the world's largest bitcoin fund, as the asset manager's initial skepticism about cryptocurrencies gives way to ambitions to become a major player in the digital asset market.
The place of the American group bitcoin The exchange-traded fund has amassed $16.7 billion in assets since launching four months ago, putting it less than $1 billion behind market leader Grayscale, which enjoyed a 10-year, $28,000 head start. millions of dollars.
Besides that Black Rock It has also launched the fastest-growing tokenized Treasury fund, which crypto hedge funds and market makers are starting to use as collateral for coin and token trading.
The measures are a sharp change, driven by growing customer interest and the rapid growth of digital assets, from just seven years ago, when CEO Larry Fink called bitcoin "a money laundering index."
At the January launch of the spot ETF, Fink described He called himself "very optimistic about the long-term viability of bitcoin" and said its fundamentals were a crucial part of "the technological revolution in the financial market."
“BlackRock has always responded to the interests of its clients, so why would cryptocurrencies be any different?” said Lee Reiners, a professor at the Duke Financial Economics Center. “However, this does not mean that they are true believers. Cryptocurrencies are not on your balance sheet and if cryptocurrencies go to zero, the impact on your finances will be negligible.”
The asset manager has been the biggest beneficiary of the Securities and Exchange Commission's January decision to approve ETFs who invest directly in bitcoin, after rejecting them for years.
Digital Asset Dashboard
Fidelity followed in third place, attracting $9.3 billion in assets. The duo was helped by large capital outflows into Grayscale, which converted a previous bitcoin product into an ETF and had been charging a much higher management fee of 1.5 percent. BlackRock charges 0.25 percent.
It also contrasts with the approach taken by some of BlackRock's biggest rivals. Vanguard, like BlackRock, an ETF giant, not only chose not to launch a bitcoin ETF, but also refused to sell third-party bitcoin funds to its brokerage clients.
BlackRock's growing confidence in the digital asset market is also highlighted by its backing of Securitize, joining Tradeweb and Hamilton Lane in a $47 million fundraising round for the platform, which uses digital tokens to represent assets. BlackRock's global head of strategic ecosystem partnerships, Joseph Chalom, now sits on Securitize's board of directors.
Two years ago, BlackRock made a minority investment in Circle, which runs the world's second-largest stablecoin, USDC. A stablecoin is a type of digital currency pegged to a sovereign currency, such as the US dollar.
"It's all coming together now, but I hope you understand that it's been a multi-year, very deliberate journey to bring the same institutional quality that sets BlackRock apart to this ecosystem, and for us that's more important than rushing through," BlackRock COO Director Rob Goldstein told the Financial Times.
Still, BlackRock's arrival in other parts of the cryptocurrency market has energized investors. In March, it launched a tokenized Treasury fund on a public blockchain, ethereum, allowing all users to track transactions on a digital ledger.
The BlackRock USD Institutional Digital Liquidity fund, or Buidl, has already surpassed rival Franklin Templeton's tokenized fund as the largest in the market, attracting $382 million compared to Franklin's $368 million.
Top traders and brokers have started using Buidl as a way to get high-quality collateral for cryptocurrency trading. Most use stablecoins like Tether's USDC or USDT, but they do not offer yield to their holders, unlike Buidl.
But others say BlackRock's long-term bet is to speed up the settlement of deals and the transfer of its funds, making them more attractive to investors who want access to their money immediately.
The asset manager had previously tested tokenization using a private JPMorgan blockchain to track assets and transactions involving a particular money market fund, said Robert Mitchnick, head of digital assets at BlackRock. That private blockchain product helped lay the groundwork for Buidl.
“That work was vitally important. . . “We think the biggest opportunity in this space was around public blockchains,” Mitchnick said.
At the end of the month, the US will begin requiring that the vast majority of commercial operations be carried out settle within one business day But executives doubt further progress can be made for investors until much of the financial system is connected to blockchains, which can close deals in minutes.
“There will come a point where the current technological setup will not work,” said Ralf Kubli, board member of the Casper Association, a Swiss-based blockchain project.
Large asset managers around the world are "thinking very deeply about what this technology can do for them," he added.
