Reposted from: Wall Street Insights Theoretically, putting digital versions of all assets from stocks to real estate on the blockchain can establish new markets and provide fast, round-the-clock transaction settlement.
In the past year and a half, the price of Bitcoin has rebounded significantly, which has promoted the performance recovery of cryptocurrency companies such as Coinbase. At the same time, it has also greatly benefited BlackRock, one of the most influential companies in the traditional financial world.
In January of this year, BlackRock launched the highly anticipated Bitcoin ETF, which allows investors to trade Bitcoin through a regular brokerage account just like trading stocks.
The fund broke new ETF issuance records and currently has assets under management reaching approximately $16.5 billion. It has become the most significant example of BlackRock combining its money management capabilities with the crypto market in the past three years.
According to media estimates, BlackRock\’s current digital asset business can generate about $88 million in revenue per year. This revenue mainly comes from fees charged by ETFs, a fund management agreement with stablecoin issuer Circle, and the launch of the company earlier this year. of a small blockchain trading fund.
While this figure is small compared to the $13.7 billion BlackRock earned from overall advisory fees last year, this revenue is expected to increase as the fund grows and the company launches more crypto products.
According to BlackRock’s grand plan, its next step will be to transfer more traditional financial assets to the blockchain through tokenization. This is also its most challenging step.
In theory, putting digital versions of all assets from stocks to real estate on the blockchain could create new markets and provide fast, round-the-clock transaction settlement.
Still, like many other financial firms, BlackRock has yet to find a way to implement this technology at scale.
Last October, JPMorgan Chase said that BlackRock and Barclays had used its Onyx blockchain to conduct a transaction involving tokenized shares of BlackRock’s money market fund.
Although the plan is still ongoing, BlackRock has since decided to focus more on using public blockchains such as Ethereum because it is easier to attract users and activity.
Mitchnick, head of digital assets at BlackRock, said: When we look back, we will find that many of the initial attempts across the industry struggled to achieve substantial success at scale.
In March of this year, BlackRock partnered with crypto startup Securitize to create a money market fund that can be traded on the Ethereum blockchain.
BlackRock also led a $47 million investment in Securitize. Its head of strategic ecosystem partnerships, Joseph Chalom, also joined the startup\’s board of directors.
The tokenized fund has attracted $385 million from 13 investors as of May 1, according to Etherscan data, a much slower start than BlackRock\’s red-hot ETF.
Winning the Bitcoin ETF war is just the beginning, BlackRock’s next step: tokenizing traditional assets
Reprinted from: Wall Street Insights Theoretically, placing digital versions of all assets from stocks to real estate on the blockchain can establish new markets and provide fast, round-the-clock transaction settlement
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May 7, 2024 4:02 pm