BlackRock moves closer to the crown of the world’s largest Bitcoin fund

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BlackRock is closing in on the crown of managing the world’s largest Bitcoin fund, as the asset manager’s initial skepticism of cryptocurrencies gives way to ambition to become a significant player in the bitcoin market. digital assets.

The American group’s spot Bitcoin The exchange-traded fund has raked in $16.7 billion in assets since its launch four months ago, putting it within $1 billion of market leader Grayscale, which enjoyed a head start 10 years and 28 billion dollars.

Next to that black rock also launched the fastest growing tokenized Treasury fund, which crypto hedge funds and market makers are starting to use as collateral for trading coins and tokens.

The moves represent a step change, driven by growing customer interest and the rapid growth of digital assets, compared to just seven years ago, when Chief Executive Larry Fink called bitcoin an “index of money laundering.” ‘money “.

At the January launch of the spot ETF, Fink describe said he was “very optimistic about the long-term viability of bitcoin” and said its foundations were a crucial part of “the technological revolution in the financial market.”

“BlackRock has always listened to the interests of its clients, so why should crypto be any different,” said Lee Reiners, a lecturer at the Duke Financial Economics Center. “That doesn’t mean they are true believers. Crypto is not on their balance sheet and if crypto goes to zero, the impact on their finances will be negligible.

The asset manager was the biggest beneficiary of the Securities and Exchange Commission’s decision in January to approve AND F who invest directly in bitcoin, after rejecting them for years.

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Fidelity follows in third place, attracting $9.3 billion in assets. The duo was helped by large outflows at Grayscale, which converted an old Bitcoin product into an ETF and charged 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 assets 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. Joseph Chalom, BlackRock’s global head of strategic ecosystem partnerships, now serves on the Securitize board of directors.

Two years ago, BlackRock took 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.

“Everything is coming together now, but I hope there’s an understanding that this is a very deliberate, multi-year journey to bring the same institutional quality that differentiates BlackRock to this ecosystem, and “For us, it’s more important than rushing,” Rob Goldstein, chief,” BlackRock COO told the Financial Times.

Despite this, BlackRock’s entry into other parts of the crypto 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 overtaken rival Franklin Templeton’s tokenized fund as the largest fund on the market, attracting $382 million to Franklin’s $368 million.

Traders and prime brokers have started using Buidl as a way to obtain high-quality collateral for cryptocurrency trading. Most use stablecoins such as Tether’s USDC or USDT but they do not offer returns to their holders, unlike Buidl.

But others say BlackRock’s long-term bet is to speed up the settlement of trades and the transfer of their funds, making them more attractive to investors who want immediate access to their money.

The asset manager had already tested tokenization using a private JPMorgan blockchain to track assets and transactions involving a particular money market fund, said Robert Mitchnick, BlackRock’s head of digital assets. This private blockchain product helped lay the foundation for Buidl.

“This work was of crucial importance. . . We believe the biggest opportunity in this space lies in public blockchains,” Mitchnick said.

At the end of the month, the United States will begin requiring that the vast majority of transactions be pay within one business day But executives doubt further progress can be made for investors until large parts of the financial system are moved to blockchains, which can complete transactions in minutes.

“There will come a time when the current technological setup will no longer work,” said Ralf Kubli, a board member of the Casper Association, a Switzerland-based blockchain project.

Large asset managers around the world are “thinking very deeply about what this technology can do for them,” he added.

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