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The world’s largest asset manager has big plans for crypto
BlackRock Inc., the world’s largest asset manager, has invested $100 million in Ethereum in anticipation of the approval of BlackRock’s new digital liquidity fund. CEO Larry Fink believes that tokenization and exchange-traded funds (ETFs) will revolutionize finance, with many experts estimating that the tokenization market could reach $10 trillion by 2030.
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According to a press release dated March 19, deposit In collaboration with the Securities and Exchange Commission (SEC), BlackRock has launched a new initiative: the BlackRock USD Institutional Digital Liquidity Fund. The fund was established in the British Virgin Islands in partnership with Securitize, a San Francisco-based asset tokenization company. BlackRock is gearing up for something big as an Ethereum wallet linked to the company has been identified and holds 100 million digital US dollars (USDC).
The creation of the BlackRock USD Institutional Digital Liquidity Fund follows the resounding success of the Bitcoin spot ETF approval in January. In an interview with Bloomberg earlier this year, Fink said, “If we could create a Bitcoin ETF, imagine what we could do with all financial instruments.” ETFs have revolutionized the way investors can gain exposure to different asset classes, and Fink believes they will play a crucial role in the tokenization of asset classes in the future.
“We think ETFs are a technology that is no different than Bitcoin was a storage of assets technology,” Fink said. “We think the next step is going to be the tokenization of financial assets, meaning every stock, every bond will have its own QIP (qualified institutional investment); it will all be on one general ledger… but most importantly, we could customize strategies through tokenization that are right for each individual. We would have instant settlement… because it’s just a line item.”
A few months later, BlackRock’s request for the Digital Liquidity Fund came as no surprise. With the success of the Bitcoin ETF, BlackRock and other institutions are waking up to the power of crypto and blockchain. Fink’s vision for the future is clear. The combination of ETFs and tokenization will transform the financial landscape, making asset classes more accessible, transparent, customizable, and secure. Blockchain technology will provide the foundation for tokenizing assets at scale. BlackRock’s strategic partnership with Securitize is a testament to the transformative power of blockchain and its ability to revolutionize the financial system.
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BlackRock isn’t the first major institution to embrace tokenization. Titan JPMorgan Chase & Co. launched Onyx Digital Assets, focusing on tokenization and managing more than $700 billion in transactions since 2015. Citi has been working with blockchain since 2015, hiring former IBM executive Ryan Rugg to lead the bank’s tokenization efforts. Another firm, Franklin Templeton, has been running its FOBXX fund on the decentralized public blockchain Stellar since 2021 — the first fund to run on a public blockchain.
BlackRock’s involvement in tokenization is expected to accelerate the mainstream adoption of digital assets and blockchain technology. The market capitalization of tokenized assets could surpass $10 trillion in 2030 in a bullish scenario and $3.5 trillion in a bearish scenario, according to a report by 21.co. Experts at Roland Berger also believe that tokenization will be a $10 trillion market by 2030. The current market capitalization of tokenized assets is around $118 billion, representing a compound annual growth rate of 109% from 2024 to 2030, according to 21.co.
With the recent SEC filing, it’s clear where Fink and BlackRock are headed. With over $9 trillion in assets under management, BlackRock is jumping into the tokenization market. While not the first, BlackRock is the largest and most influential player to join the space. The tokenized asset market will grow exponentially as BlackRock brings credibility to the table in addition to its vast resources. Bitcoin ETF in January 2024 helped Bitcoin Tokens have reached new all-time highs, proving the power of institutions in financial markets. With the growing interest of institutions like BlackRock, tokenization will undoubtedly become a massive market.
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This item Larry Fink’s BlackRock Invests $100 Million in Ethereum Blockchain: World’s Largest Asset Manager Has Big Plans for Cryptocurrencies originally appeared on Benzinga.com
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