BlackRock is planning new use cases for its BUIDL product and is in ongoing discussions with some global crypto exchanges. According to people familiar with the matter, Binance, OKX, and Deribit are some of the crypto exchanges involved.
This discussion focuses on using the BUIDL token more widely as collateral for crypto derivatives trades. Noteworthy, this comes when Wall Street investors seek strategies to enter the digital asset ecosystem.
BlackRock BUIDL Dominating Rivals
BUIDL is BlackRock’s first tokenized offering, which was launched recently but is now successfully dominating the ecosystem.
Within six weeks of its launch, the offering outperformed similar products. In May, it had gained a market cap of $375 million. At the time, this exceeded the market cap of a year-old Franklin OnChain U.S. Government Money Fund (BENJI). The Franklin product’s market cap was pegged at $368 Million at the time.
The BUIDL fund is designed for qualified institutional investors with at least $5 million in available capital. So far, FalconX and Hidden Road, two of the biggest crypto prime brokers, have authorized the use of BUIDL as collateral among their clients. Recently, Komainu noted that clients eligible to invest in BUIDL can trade via Hidden Road using the token as collateral.
The tokenized offering has seen some major adoption recently. This includes the transfer of $50 million from Ondo Finance, OUSG, which eventually made it the largest Treasury fund. At another time, Ethena announced the arrival of a new stablecoin backed by the asset BlackRock BUIDL fund.
BUIDL has attracted more institutional funds than its counterparts, including FOBXX, OUSG, USDY, and USTB.
BlackRock and Crypto Invasion – Spot Bitcoin ETF
Generally, BlackRock has made significant strides in the crypto industry in such a short time.
Apart from its BUIDL tokenized product, its crypto products, which are barely a year old, are topping the charts. The BlackRock iShares Bitcoin Trust (IBIT), which got trading approval from the SEC in January, has surpassed rivals in inflows.
Weeks ago, Bitcoin ETFs saw $235.19 million in inflows, reflecting a growing investor interest in the market.
Of this value, only BlackRock’s IBIT raked in $97.88 million. On October 16, spot BTC ETFs saw a net inflow of $458 million, and IBIT led by $393 million. This was around when Bitcoin ETFs surpassed $20 billion in total net flows for the first time.
BlackRock iShares Ethereum Trust (ETHA) is not relegated to the background as it equally hits crucial milestones.
Are Exchanges Under Threat?
The sudden entrance of institutional investors and their aggressive strategy might threaten the role of crypto firms. However, carefully integrating both sectors could help in bridging the TradFi and DeFi gap.
For a long time, crypto leaders have sought strategies to close the gap between the two key niches. The Coin Republic recently posted about the roles of TradFi and DeFi in the economy. While there are some differences, their fusion creates a level of balance.
The entrance of reputable firms like BlackRock into the sector has given credence to the industry. Rather than feeling threatened, exchanges may innovate better to compete with cash-heavy Wall Street competitors.
