blackrock

BlackRock eyes BUIDL token as collateral in crypto derivatives market: report

Published

1 month ago

October 19, 2024

BlackRock is trying to have its digital money-market token, BUIDL, used as collateral in cryptocurrency derivatives trades.

People familiar with the discussions say the company is ‘in talks’ with major crypto exchanges like Binance, OKX, and Deribit about the possibility, according to Bloomberg.

BUIDL is a token designed for qualified institutional investors, with a minimum investment of $5 million. It is a digital representation of BlackRock’s USD Institutional Digital Liquidity Fund, a money-market fund that invests in U.S. Treasury bills, cash, and other secure instruments.

BUIDL differs from traditional stablecoins like Tether’s USDT (USDT) because it pays interest to holders, which could be attractive to derivatives traders.

Is BlackRock trying to dominate stablecoins and derivatives markets?

Crypto derivatives are financial contracts that derive their value from crypto price movements. Traders use these contracts to speculate on the price of assets like Bitcoin (BTC) without actually buying them. To participate, traders often need to put down collateral, which can be in the form of stablecoins. Tether’s USDT, for example, is commonly used in this role because it maintains a stable value of $1, making it reliable for securing trades.

However, BUIDL’s entry into this space could challenge USDT’s dominance. BlackRock is hoping that more platforms will accept BUIDL as collateral, which could significantly expand its market reach, per Bloomberg.

Prime brokers FalconX and Hidden Road already allow their clients to use BUIDL as collateral, and custodian Komainu recently joined that list. These early adopters include hedge funds and other institutional investors.

Crypto derivatives trading accounted for over 70% of all crypto trading volume in September, with $3 trillion worth of contracts traded that month alone, according to research firm CCData.

That makes derivatives a huge part of the crypto ecosystem, and having BUIDL accepted on major exchanges like Binance and Deribit could position BlackRock as a major player in this market.

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Bitcoin

Crypto product record major inflow up to $2.2 billion

Published

1 day ago

November 19, 2024

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CoinShares, a digital asset manager, reported that last week crypto products saw a major inflow from institutional investors of up to $2.2 billion.

The latest U.S. Election, on Nov. 5, still stimulated the weekly cryptocurrency inflow up to $2.2 billion. The number increased 15% from the previous week by about $1.98 billion.

According to CoinShares’s release, on Nov. 18, digital asset inflows recorded $33.5 billion year-to-date and hit a new peak of under-asset management (AUM) up to $138 billion.

Bitcoin (BTC) saw the largest inflow based on assets last week of around $1.48 billion or equal to 67%. Followed by Ethereum (ETH) and Solana (SOL) with inflows $646 million and $23.9 million respectively.

The Beam Chain network upgrade proposal by Justin Drake has increased Ethereum’s inflow from $157 million. Only multi-asset and Binance Coin (BNB) record a week’s outflow.

BlackRock’s iShares Bitcoin Trust ETF (IBIT) recorded the highest surge in crypto product from last week’s inflow up to 63% or up to $2.1 billion. While the rest of the funding recorded an outflow ranging from $8 million to $153 million, including Grayscale and Fidelity.

Crypto product driving factor: U.S. Election

James Butterfill, CoinShares head of research, says a combination of looser monetary policy and a Republican winning a majority of the Congress and Presidency appears to be a driving factor of these inflows.

Donald Trump winning the White House’s second term still brings a positive rally for the cryptocurrency industry, as well as the crypto product. Buterfill has mentioned that Trump’s presidency would bring crypto-friendly regulations and fiscal policy.

Earlier, Trump picked several names for secretary on his cabinet who identified as pro-crypto personalities including Elon Musk, Tom Emmer, and Robert F. Kennedy Jr.

Bitcoin Act, who were proposed by Republican Senator Cynthia Lummis, and the Bitcoin Strategic Reserve also boosts the crypto investor’s confidence. He also mentioned this favorable outlook may bring the best potential of Bitcoin in the future.

“The next four years may witness an unprecedented level of institutional support, increased government interest, and broader public adoption, setting the stage for Bitcoin to further solidify its place in the global financial landscape,” Buterfill mentioned in the other report.

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Abu Dhabi

BlackRock receives Abu Dhabi commercial license after Saudi approval

Published

2 days ago

November 18, 2024

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BlackRock has received a license to operate in Abu Dhabi, further expanding its business into the Middle Eastern region after gaining approval from Saudi Arabia just last month.

According to a Bloomberg report published on Nov. 18, the investment management company plans to apply to get regulatory approval to set up business in the Abu Dhabi Global Market, at the heart of UAE’s capital.

BlackRock’s Abu Dhabi office will primarily work with sovereign wealth funds, wealth managers and investment vehicles based in the region.

This latest development comes a month after BlackRock secured approval from Saudi Arabia to open up a headquarters in Riyadh. The asset manager has continued to branch out its business reach into the Middle East after announcing it would get up to $5 billion from the Public Investment Fund to invest in the Middle East and build a team rooted in Riyadh.

Additionally, BlackRock has partnered with Abu Dhabi’s Sheikh Tahnoon bin Zayed Al Nahyan to bankroll the build-out of data warehouses and energy infrastructure within the region.

In a statement, Head of the Middle East for BlackRock, Charles Hatami, stated several reasons why the firm chose to operate in Abu Dhabi. Considering Abu Dhabi’s status as a hot spot for capital markets, he said that the region’s proactive government policies and commitment to sustainability make it an ideal location.

“Abu Dhabi has rapidly transformed into a global financial center,” said Hatami, adding that the firm plans to focus on private markets, specifically AI infrastructure, in Abu Dhabi.

BlackRock Chief Executive Officer Larry Fink explained that having the investment firm operate in both Abu Dhabi and Riyadh was a logical move, as both regions are competing head-to-head with Dubai to become the Middle Eastern business hub.

Both regions are famous for holding over $1 trillion of sovereign wealth, representing some of the biggest capital in the world.

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blackrock

No, BlackRock Won’t Ossify Bitcoin

Published

4 days ago

November 16, 2024

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In his Take from Wednesday, Shinobi argued that the surge of institutional bitcoin adoption will lead to premature ossification of the Bitcoin protocol. While I share his concern to an extent, I am less convinced this is necessarily true.

Bitcoin is inherently a permissionsless system. For protocol changes specifically, it “just” requires users to upgrade their software. And when it comes to deploying soft forks, it really only needs a majority of miners to upgrade. (This is admittedly a simplification for the sake of brevity, but I’d say it’s still “true enough” to state it this way.)

Miners will for the most part follow economic incentives. If a protocol upgrade makes Bitcoin (say) more scalable or more private, there is actually good reason to think this would make Bitcoin more valuable, which in turn means there is good reason to think miners will activate the upgrade.

Even in an extreme scenario where a soft fork occurs through a user activated soft fork (UASF) that splits the blockchain, and even if in this scenario the institutions prefer the legacy version of the chain (this is the scenario Shinobi is ultimately envisioning), it’s not obvious to me that the non-upgraded chain would “win”.

Just owning lots of bitcoin does not give you a “say” on which side of a chain split is more valuable. Initially, everyone receives coins on both sides. Only if you’re willing to buy or sell these coins (eg.: “dump” coins on one side of the split to get more coins on the other side) does your economic weight matter. But this means you have to take a risk: skin in the game.

Would big institutions really be willing to bet everything they own on the version of the protocol without the upgrade? That’s a big assumption to make.

This article is a Take. Opinions expressed are entirely the author’s and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.

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