As a seasoned researcher who has witnessed the evolution of the financial industry for decades, I find the potential move by BlackRock into the crypto space to be nothing short of groundbreaking. Having closely followed the development of blockchain technology and its applications, I am well aware that such a shift could mark a turning point in the crypto ecosystem.
According to Token Terminal, a data platform on the blockchain, there could be a major change in the cryptocurrency world as they anticipate that BlackRock, a $10 trillion asset manager and ETF provider, might soon reveal their own blockchain platform.
BlackRock’s Crypto Masterplan
A recent study conducted by Token Terminal examines BlackRock’s foray into the cryptocurrency market, detailing the company’s tactic as it navigates this burgeoning sector of digital assets.
Based on their research, BlackRock divides cryptocurrencies into three main groups: cryptocurrencies such as Bitcoin and stablecoins, digital representations of real-world assets (RWAs), or tokenization, marked by the launch of its BUIDL fund on the Ethereum blockchain.
BlackRock continues to expand its portfolio by acquiring ownership of the iShares Bitcoin ETF, managing assets worth approximately $21 billion, holding a share in Circle, the company behind the USDC stablecoin that has a circulating supply of around $34 billion, and maintaining a position in Securitize, the firm responsible for managing the BUIDL on-chain money market fund which holds about $500 million in assets.
Regarding Bitcoin, BlackRock acknowledges three key benefits: firstly, being a global, internet-based asset that can be easily accessed anywhere; secondly, offering smooth cross-border transaction capabilities; and lastly, serving as a shield against inflation because of its limited supply.
By capitalizing on these benefits, BlackRock is now serving its wide array of international clients with the introduction of IBIT and ETHA ETFs, thereby creating a distinctive niche in its service offerings. This action hints at a possible strategy to expand this product development approach to other significant cryptocurrencies like Solana (SOL), potentially broadening their crypto asset portfolio.
The $10 Trillion Blockchain?
BlackRock aspires to achieve more than just providing crypto-linked investment opportunities. As per Token Terminal’s findings, the company envisions that blockchain technology could transform capital markets dramatically. This transformation could lead to round-the-clock operations, enhanced transparency, increased access for investors, lower fees, and faster settlement times.
Token Terminal’s prediction supposes that BlackRock might be preparing to unveil its blockchain framework, using Coinbase’s strategy as a guide with its Base platform.
Making this strategic choice could help BlackRock unify and simplify the tracking of investments spread over various asset types, which collectively amount to an impressive $10 trillion in managed assets.
As stated by Token Terminal, if realized, this proposed blockchain system would function as one universal, globally connected, interoperable, and transparent database. It could potentially bring about a transformative change in BlackRock’s operational structure, while also establishing a groundbreaking benchmark within the financial sector.
Instead, it’s currently unclear if the asset manager plans to extend its blockchain and cryptocurrency product offerings beyond ETFs and its BUIDL fund on the Ethereum blockchain anytime soon.
In the realm of cryptocurrencies, the overall market cap currently hovers around $2 trillion. However, it dipped as low as $1.69 trillion on Monday, August 5, marking a 7-month low.
In contrast, as we speak, Bitcoin has failed to maintain its $60,000 support and is being traded at around $59,500, representing a decline of more than 1% within the past day.
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2024-08-13 10:12