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BlackRock Enters Tokenisation Sector as Bull Run Well and Truly Underway

BlackRock files for tokenised fund on Ethereum 

BUIDL, a tokenised yield-bearing fund tied to US treasury bills, has accumulated $240 million worth of assets under management in a week of trading. 

BlackRock has only just entered the crypto scene, and it’s fair to say in that short period of time they are killing it. The world’s largest financial institution do have an advantage over other industry participants – stacks upon stacks of cash – but the team’s Bitcoin spot ETF has still outperformed all others in the market, now boasting billions in AUM (assets under management). And the business’s next ploy, a tokenised fund launched on Ethereum, has gone live with similar results. 

The new fund, made in conjunction with Coinbase and Securitize, is called BUIDL and provides investors access to a yield-bearing asset represented via tokens. Each BUIDL token is intended to be valued at one US dollar and distributes monthly dividends. Most of the underlying assets are tied up in US Treasury bills, while offering investors the benefits of the blockchain such as fast settlement, lower fees and excellent liquidity. 

Unfortunately, unless you are a millionaire (not an exaggeration), you cannot access BlackRock’s new financial product. The minimum investment requirement is a whopping USD $5 million – a figure targeting businesses rather than individual entities. So far, it has mostly been favoured by crypto companies that want to manage their finances through a stable, reliable means while still taking advantage of the blockchain.  

In just a week of trading, BUIDL has raked in $240 million. According to CEO Larry Fink, this is only just the beginning: 

“The next step is the tokenisation of financial assets, and that means every stock, every bond.” 

Tokenisation is often touted as the true intersection of blockchain technology, where the traditional financial market will intersect and global adoption will explode. While BUIDL is still a niche offering, Fink and co clearly have ambitious goals in mind – and the benefits of the blockchain might be coming to your favourite brokerages sooner rather than later. 

Bitcoin Drives ETFs to Second-Best Q1 Performance on Record 

BlackRock and Fidelity lead the way as the exchange-traded fund markets surge thanks to introduction of Bitcoin ETFs. 

After Gary Gensler and the Securities and Exchange Commission (SEC) reluctantly approved trading of spot Bitcoin ETFs in the United States, the market kicked into overdrive. And data from Bloomberg analyst, Eric Balchunas, shows that Q1 2024 was the ‘second best start to the year ever’, with USD $196 billion rushing into exchange-traded funds. 

The barrier to entry for investment is the lowest it has ever been. Nowadays, you can download apps or setup platforms to automatically invest tiny amounts into funds – something that was impossible barely a decade ago. This has no doubt played a role in the surge of ETF activity, along with the continued growth of available products. But you know what else has played a role? 

The introduction of spot Bitcoin ETFs has introduced a whole new layer of interest into the US markets. An analysis from Morningstar shows that of the top six ETFs (based on inflows) in Q1 2024, two of them contained Bitcoin.  

Grayscale report suggests we are in the middle stages of a bull run 

According to the report, Bitcoin’s increasing dominance demonstrates its status as a “vanguard” that lays the groundwork for the rest of the altcoin market to flourish.  

There’s been plenty of heated debate among the crypto community on whether we’re in a bull run or not. Of course, heading to Twitter for any sort of intelligent discussion can be like arranging deckchairs on the Titanic, but when actual financial institutions weigh in, it might be time to pay attention. And according to an official report from Grayscale – titled Anatomy of a Bitcoin Bull Marketwe are smack-bang in the middle of a bull market. 

A Bitcoin bull run has historically preceded an altcoin run, as investors look for greater profits in riskier assets as the crypto’s market capitalisation rises. Grayscale’s report suggests that we are toward the latter-middle (the “fifth baseball innings”) era of the current run. So, all things being equal, the report suggests that Bitcoin’s current run doesn’t have a huge amount of room for growth left in it. 

But, it’s worth remembering that things are different this time. There are three keys to BTC hitting its all-time high in 2024: 

  1. ETFs dominating the news cycle and seeing billions worth of inflows, beating out most expectations. 
  1. Money re-entering decentralised finance, with total value locked (TVL) metrics increasing across several networks. 
  1. Stablecoins inflows are growing on a range of blockchains, which are typically signs of a healthy and active market. 

These are all relatively new market factors (especially ETFs) that could completely change the state of play. On top of this, the current trend is largely being driven by institutional investment. Google Trends still shows searches for “crypto” are well below 2021 highs, while Santiment data shows that retail investors are still sitting on the sidelines.


Google Trends searches for “Crypto” 

With the Bitcoin halving just around the corner, it’s getting harder and harder to predict exactly where in the bull market we’re currently sitting – although Grayscale’s report may be the best attempt yet. 

Written by

Ben Knight