BlackRock starts digital asset fund supported by $100m on Ethereum

BlackRock has announced the creation of the BlackRock USD Institutional Digital Liquidity Fund in partnership with Securitize, a leading asset tokenization firm from the British Virgin Islands.

While the specific assets the fund will hold remain undisclosed, Securitize’s involvement hints at a focus on tokenizing real-world assets (RWA). The process involves representing ownership of a broad array of assets through a blockchain token, a practice gaining traction for its potential to enhance asset liquidity and efficiency.

The announcement and SEC filing of BlackRock’s new fund had an immediate impact on the digital assets market. Ondo Finance‘s native token, ONDO, witnessed a surge of up to 22% in value, significantly outperforming Bitcoin (BTC). Ondo Finance operates a platform for RWA, highlighting the market’s positive reaction to BlackRock’s initiative.

Etherscan also indicated a movement of $100 million of Circle’s USDC stablecoin to an address linked to a Securitize deployer. The motion is speculated to represent a seed investment into the new fund, although such connections have not been confirmed.

The venture into digital liquidity funds builds on BlackRock’s ongoing exploration of digital assets. The company made headlines by listing a spot-based Bitcoin ETF in January, which quickly amassed over $15 billion in assets under management. Additionally, a filing for a spot Ether (ETH) ETF was made last year, signaling BlackRock’s deepening commitment to integrating blockchain technologies into its offerings.

In a January CNBC interview, BlackRock CEO Larry Fink shared that BTC and ETH ETFs are preliminary steps toward a broader shift toward asset tokenization. According to Fink, this represents a future direction for the financial sector, offering prospects for quicker settlements and enhanced operational efficiencies.