BlackRock’s BUIDL fund inches toward $500 million amid crypto market struggles BlackRock’s BUIDL fund inches toward $500 million amid crypto market struggles
BlackRock's BUIDL fund has captured almost 30% of the market in less than four months of its operations.
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Updated: Jul. 8, 2024 at 11:57 am UTC
Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.
BlackRock’s USD Institutional Digital Liquidity Fund (BUIDL) is close to reaching $500 million in assets under management.
The tokenized fund, represented by the BUIDL token on the Ethereum network, now holds $491 million in assets, according to Dune Analytics data.
Blockchain analytics platform IntoTheBlock noted that this milestone comes during a period of price struggles for major digital assets like Bitcoin and Ethereum. It stated:
“While the crypto market struggles, BlackRock’s BUIDL fund, operating on the Ethereum network, continues to attract new investors. The fund requires a minimum entry of $5 million.”
The fund, created with the tokenization services platform Securitize, invests 100% of its total assets in cash, US Treasury bills, and repurchase agreements, allowing investors to earn yield while holding the token on the blockchain.
Notably, it has captured nearly 30% of the market since its launch in March. However, on-chain data shows that only 16 wallets hold tokens from the fund, with 75% of the supply concentrated among the top 5 holders.
Interestingly, Ondo Finance, an institutional-grade on-chain finance firm, owns about 44.8% of the BUIDL fund. These funds are distributed across its two wallets, OUSG Holding and OUSG Instant Manager.
Tokenization interest is growing.
BlackRock’s BUIDL rapid growth highlights the growing institutional interest in tokenizing real-world assets (RWA) like bonds and credit.
Over the past year, this process has gathered broad adoption, with a recent Ernst & Young survey showing that 50% of institutional investors are interested in tokenized assets. The report indicated that investors pile into these assets because it has the benefit of portfolio diversification and can also provide greater liquidity.
It added:
“Tokenizing alternatives has the potential to enable access to a broader array of investors through lower minimums, and also the ability to enable diversification to larger institutional investors as they allocate to more alternatives, and drive liquidity once secondary markets are established.”
According to Dune Analytics data, more than $1.5 billion worth of US Treasuries now exist on blockchain networks like Ethereum, Polygon, and Solana.
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Oluwapelumi Adejumo
Oluwapelumi values Bitcoin's potential. He imparts insights on a range of topics like DeFi, hacks, mining and culture, underlining transformative power.
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Bitcoin
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BlackRock
BlackRock, synonymous with global asset management, is an American multinational investment management corporation based in New York City.