Bittime – BlackRock, the institutional investment management giant, is increasingly stepping into thedigital assetwith plans to launch a new fund based on asset tokenization onEthereum.
On March 19, BlackRock announced a collaboration with Securitize, a digital asset tokenization specialist, to offer a fund. The United States Securities and Exchange Commission (SEC) accepted BlackRock's application to launch the "BlackRock USD Institutional Digital Liquidity Fund". However, there is no official information regarding the total value of these funds.
“This is very good news for Ethereum,” commented Galaxy CEO Mike Novogratz on March 20.
BlackRock Turns to RWA
The fund will operate on the Ethereum blockchain and trade under the ticker BUIDL. According to Etherscan, the Ethereum address hosting these funds just made its first transfer about two weeks ago. The address holds 100 BUIDL tokens and only has one owner.
Securitize, BlackRock's partner in Real World Asset (RWA) tokenization , has previously worked with KKR, Hamilton Lane and other companies on token-based fund products, Bloomberg reported.
However, BlackRock's new product is only available to institutional investors, with a minimum investment set at $100,000.
RWA tokenization (RWA) is the process of placing traditional assets such as gold, commodities, government bonds, and real estate onto the blockchain. The industry is predicted to be worth trillions of dollars in the next decade, and Wall Street doesn't want to be left behind.
Major banks such as JPMorgan, Citi, and Bank of America are experimenting with RWA tokenization. Private wealth management firm Bernstein estimates about 2% of the total global money supply, or about $3 trillion, could be tokenized on the blockchain in the next five years. Meanwhile, Citigroup estimates the tokenization market could reach $5 trillion by 2030.
Check Today's Crypto Market:
ETH Price Drops
The launch of the fund coincides with the expected approval of a spot Ethereum (ETH) ETF by the SEC in May. However, analysts estimate that the chances of such approval are slimmer because regulators have not yet interacted with fund issuers, and the potential for complications related to staking arises.
BlackRock was among the hedge funds to propose a spot ETH ETF following the approval and success of their Bitcoin product.
Ethereum prices did not react to this news and instead fell 5.8% on the day, hitting $3,150 in early Asian trading Wednesday. ETH price is currently recovering slightly to around $3,200, but the crypto price correction looks set to deepen.
Ethereum has fallen 21% from its 2024 high of $4,070 on March 12 and is still down 34% from its late 2021 high.
The Impact of BlackRock's Entry into RWA
BlackRock's decision to dive into the RWA (RWA) space via blockchain-based tokenization has several potential impacts:
1. Increasing the Legitimacy of Crypto Assets
BlackRock's move, as one of the world's financial giants, could increase institutional investors' confidence in crypto assets as a whole. This has the potential to attract more institutional investment into the crypto ecosystem, which could ultimately drive significant industry growth.
2. Greater Liquidity
Tokenization of RWA assets is predicted to increase the overall liquidity of the crypto market. Traditional assets such as bonds and real estate, which were previously difficult to trade instantly, can now be accessed and traded more easily through blockchain tokenization. This increase in liquidity can minimize crypto asset price volatility.
3. New Opportunities for Investors
RWA tokenization opens up new investment opportunities for retail and institutional investors. Investors can invest in traditional assets previously only available to investors with large capital, such as real estate and infrastructure, through more affordable token ownership.
4. Tighter Regulations
The entry of large players such as BlackRock into the crypto asset space could trigger stricter regulations from financial authorities. Although regulations can help increase the credibility and stability of the crypto industry, regulations that are too strict also have the potential to stifle innovation.
Also Read: RWA Tokenization on a Large Scale Not Feasible Yet?
The Future of RWA Tokenization
RWA tokenization (RWA) is still in the early stages of development, but its potential is enormous. Going forward, we can expect to see:
1. More Assets Are Tokenized
In addition to bonds and real estate, various other types of traditional assets, such as commodities and works of art, also have the potential to be tokenized in the future. This will further enrich and expand the scope of investment in the crypto ecosystem.
2. Infrastructure Improvement
As the tokenization of RWA assets continues to develop, the infrastructure that supports this technology will also continue to be developed and improved. It includes a dedicated trading platform for asset tokens, secure custodian services, and clearer regulations.
3. Wider Adoption
With the benefits it offers, RWA tokenization is predicted to be adopted more widely by various financial institutions and individual investors. This will further accelerate the integration of crypto assets with traditional financial systems.
BlackRock's foray into the realm of RWA tokenization marks an important milestone in the development of the crypto industry. This decision not only impacts BlackRock and their investors, but also has the potential to change the investment landscape as a whole. Let's wait and see how these innovations will continue to develop and shape the future of finance.
Also read How to Buy Crypto:
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To be able to buy crypto assets on Bittime , make sure you have registered and completed identity verification. Apart from that, also make sure that you have sufficient balance by depositing some funds into your wallet. For your information, the minimum purchase of assets on Bittime is IDR 10,000. After that, you can purchase crypto assets in the application. Learn Complete Guide How to Buy Crypto on Bittime .
Monitor price chart movements of Bitcoin (BTC) , Ethereum (ETH) , Solana (SOL) and other cryptos to find out today's crypto market trends in real-time on Bittime.
Also Read:
5 RWA Crypto Projects to Pay Attention to in 2024
Art Revolution: Artrade Can Turn Works of Art Into RWA
ONDO Prices Rise After BlackRock Launches Initiative to Create Real World Assets (RWA)
DISCLAIMER : This article is informational in nature and is not an offer or solicitation to sell or buy any crypto assets. Trading crypto assets is a high-risk activity. Crypto asset prices are volatile, where prices can change significantly from time to time and Bittime is not responsible for changes in fluctuations in crypto asset exchange rates.
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