BlackRock Plans Tokenization Technology After Bitcoin and Ethereum ETF Success
BlackRock is developing a new tokenization technology aimed at bringing real-world assets (RWAs), including exchange-traded funds (ETFs), onto blockchain networks. The initiative seeks to expand investor access and improve the efficiency of capital markets through asset digitization. The technology represents a key step toward integrating traditional financial products with blockchain-based systems.
The company’s focus on tokenization highlights a broader industry shift toward merging conventional finance with decentralized solutions. This approach could eventually help investors gain exposure to digital versions of assets such as real estate, equities, and bonds. By bridging traditional and digital markets, tokenization is expected to enhance transparency and accessibility while promoting long-term investment participation.
Growth of Digital Assets and Market Impact
BlackRock’s assets under management rose to $13.4 trillion in the third quarter, compared with $11.4 trillion during the same period last year. The firm reported $61 million in revenue from its digital asset products, a small portion of its $6.5 billion quarterly total. Its USD Institutional Digital Liquidity Fund, known as BUIDL, continues to expand and now holds $2.8 billion in assets.
As the crypto market reaches nearly $4 trillion in value, the tokenization of ETFs could attract a wider range of investors to traditional markets. This development reflects a growing trend of global investors diversifying between crypto and conventional financial assets. Tokenized funds may also provide greater liquidity and accessibility, encouraging broader participation in regulated investment products.
Expanding Role in the Crypto ETF Market
After regulatory approval in 2024, BlackRock became one of the first asset managers to launch spot Bitcoin (BTC) and Ethereum (ETH) ETFs in the United States. These funds, known as IBIT and ETHA, now manage $93 billion and $17 billion in assets, respectively, within two years of their introduction.
Despite overall outflows in the Bitcoin ETF sector totaling $326 million earlier this week, IBIT recorded net inflows of $60 million. ETHA, on the other hand, experienced outflows of $310 million following a general market pullback. The company continues to expand its presence in the digital asset market, viewing tokenization as a major growth opportunity for the coming decade.
