As an analyst with a background in traditional financial markets and a growing interest in digital assets, I find BlackRock’s recent pivot towards Ethereum on public blockchains a significant development that warrants attention. The world’s largest asset manager’s decisive stance, as conveyed by Samara Cohen during the Coinbase State of Crypto Summit 2024, aligns with the broader consensus among traditional market participants.
As a crypto investor, I’m excited about BlackRock’s recent announcement indicating a stronger affinity towards public blockchain networks like Ethereum over permissioned alternatives. This shift in perspective was revealed during the “Beyond Bitcoin ETFs – What’s Next on the Institutional Roadmap?” panel at Coinbase’s State of Crypto Summit 2024 last Thursday.
BlackRock Doubles Down On Ethereum
Samara Cohen, BlackRock’s Chief Investment Officer for ETF and Index Investments, expressed a clear opinion on the advancement of blockchain technology in financial sectors. She shared, “Initially, we believed private, permissioned blockchains would take the lead. However, it’s become clear that public blockchains are more beneficial for the overall system.”
As a researcher studying the trends in traditional financial markets, I’ve noticed an emerging agreement among industry players regarding the benefits of open-source platforms such as Ethereum. This consensus is rooted in the desire to maintain a unified market liquidity and foster broader, more efficient participation.
At a recent Coinbase event, Samara Epstein, Blackrock’s Chief Investment Officer for ETF and Index Investments, expressed her viewpoint. She stated that permissioned blockchains have ceded ground, and traditional market players are increasingly favoring open-source Ethereum for tokenization to avoid liquidity fragmentation.
— matthew sigel, recovering CFA (@matthew_sigel) June 13, 2024
As a financial analyst at BlackRock, I’m excited to share that our latest initiative aligns with our recent foray into tokenization. In March, we partnered with Securitize, a leading US-based firm, to launch our first tokenized fund on the Ethereum blockchain. This innovative move brought an initial $100 million in liquidity, denominated in USD Coin (USDC), to the platform. Our “Institutional Digital Liquidity” fund primarily invests in cash, short-term debt securities, and US Treasury bonds. By utilizing Ethereum’s architecture, we’re able to facilitate the fund’s operations more efficiently.
Hunter Horsley, the CEO of Bitwise, added fuel to the ongoing discourse between BlackRock and the use of public blockchains. In a separate conversation, Horsley emphasized that the long-standing debate over permissioned versus permissionless blockchains has reached its conclusion. According to him, “The debate on this topic has largely subsided. Permissionless blockchains are now the preferred choice.”
Anthony Sassano, a well-known angel investor, advisor, and founder of The Daily Gwei, shared his perspective: “An executive from BlackRock, the world’s largest asset manager, has made it clear that public blockchains represent the future – more specifically, Ethereum. If this statement doesn’t ignite your bullishness, then perhaps nothing will.”
During the panel discussions, Finance industry heavyweights such as Sandy Kaul, Senior Vice President at Franklin Templeton, and Alesia Haas, CFO of Coinbase, shared their perspectives. The panel’s focus highlighted the significance of the year 2024 for the more comprehensive merging of cryptocurrencies with traditional financial markets (TradFi), utilizing tools such as ETFs and asset tokenization.
Among these finance industry heavyweights, there is a widespread agreement: the adoption of blockchain technology in traditional financial systems is gaining momentum. Not just growing, but it’s happening via platforms that prioritize transparency, ease of use, and inclusive decision-making. Ethereum’s popularity among institutions like BlackRock, opting for this decentralized technology over permissioned alternatives, is a noteworthy shift in this direction.
At press time, ETH traded at $3,522.
Featured image created with DALL·E, chart from TradingView.com
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2024-06-14 12:41