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News: Blackrock has filed a form with the Securities and Exchange Commission (SEC) of the United States to launch a token investment fund.
In addition, the community has revealed the development of a token called “Blackrock USD Institutional Digital Liquidity Fund” or BUIDL on the Ethereum blockchain. Let’s see all the details below.
Summary
News and SEC approval: Blackrock’s crucial step for the BUILD token
As anticipated, Blackrock, an excellent investment management company based in the United States, is expanding its interest in digital assets.
The company has introduced an exchange-traded fund (ETF) based on Bitcoin (BTC) and has applied for approval to launch its Ishares Ethereum Trust, with the goal of listing it on Nasdaq once approval from US authorities is obtained.
The formal documentation for the SEC, known as Form D, was officially approved by an executive at Blackrock on March 14, 2024.
Furthermore, Etherscan has revealed the creation of a token called Blackrock USD Institutional Digital Liquidity Fund (BUIDL), with a single holder address of 100 BUIDL tokens issued on March 4, 2024.
According to Blackrock’s information sheet, the fund accepts investments with a minimum entry requirement of $100,000.
Basically, Blackrock ICS US Dollar Liquidity Fund operates as a short-term money market fund, led by this financial giant.
Investments are mainly focused on short-term securities, such as commercial paper, certificates of deposit, and variable rate securities, with a significant portion of assets held in liquidity reserves.
However, SEC approval for such initiatives is still uncertain. As we know, in fact, the US regulatory authority has taken regulatory actions against numerous cryptocurrency companies.
Two weeks ago, the SEC postponed its verdict on Blackrock’s Ethereum spot ETF, confirming a similar position adopted for similar applications.
Union between traditional finance and cryptocurrencies?
During a panel held at the Blockworks Digital Asset Summit in London, a BlackRock executive highlighted the significant convergence between traditional finance and cryptocurrencies thanks to the Bitcoin ETFs in the United States.
On Tuesday, Tony Ashraf, CEO of BlackRock, emphasized how the inclusion of Bitcoin in ETFs has had a significant impact on the financial market. Thus opening the way to a new phase of duality between the two financial spheres.
On the other hand, the cryptocurrency sector is revolutionizing traditional finance through the tokenization of assets, thus bringing both physical and financial assets onto the blockchain.
BlackRock, with assets under management of around $10 trillion, has successfully launched the iShares Bitcoin Trust (IBIT), one of the first Bitcoin ETFs in the United States, dominating the market with significant net inflows compared to competitors.
This movement has led to an opening towards new customer segments, with a wide demographic range of investors who can now access cryptocurrencies through ETFs.
Although Bitcoin ETFs are experiencing unprecedented success with record net inflows, there is still a vast potential for growth.
Specifically with forecasts indicating an increase in managed assets in the sector from billions to hundreds of billions of dollars in the coming years.
The increasing liquidity resulting from these allocations could further attract companies, sovereign funds, and central banks, making Bitcoin increasingly attractive as an asset class for new customer segments.
Latest news on BlackRock’s iShares Bitcoin Trust
BlackRock has recently solidified its dominance in fund management and Exchange Traded Funds (ETF) with the approval of the iShares Bitcoin Trust.
The company has quickly accumulated about 223,645 Bitcoin, worth approximately 16.35 billion dollars, in less than two months, demonstrating its leadership in the industry.
For comparison, MicroStrategy has accumulated only about 205 more Bitcoin in over two years.
The IBIT of BlackRock has enjoyed significant benefits from its high liquidity, strong market reputation, and a small sponsor fee of 0.25%.
With the expectation of additional funds that will be incorporated into IBIT in the near future, including from the Global Allocation Fund by BlackRock, it is likely that the company will surpass the Grayscale Bitcoin Trust (BTC) in the short term.
The Grayscale GBTC has experienced significant outflows of about 237,653 Bitcoin since the approval of spot Bitcoin ETFs in early January, currently holding approximately 389,642 BTC.
Its high sponsorship fee, around 1.5%, has contributed to these outflows, which have been higher than the average of less than 0.3%.
BlackRock also set the record for the highest daily cash inflows in terms of US dollars, with 849 million dollars. Thus surpassing the previous record of 788 million dollars set on March 5, 2024.
On Thursday, the regular cash flows to IBIT experienced a drastic drop due to the first signs of correction in the Bitcoin market, recording only 4,886 Bitcoin. However, IBIT offset the outflow of 3,638 Bitcoin recorded by GBTC on the same day.