Fed Stays Pat, Hints at Rate Cuts: Bitcoin Skyrockets as BlackRock Steps into the “$5 Trillion Market by 2030”
The price of Bitcoin has experienced a dramatic surge, adding over $100 billion to its market capitalization, following the Federal Reserve’s decision to maintain interest rates. Fed Chair Jerome Powell’s suggestion of potential rate cuts further fueled the rally. Intriguingly, even before the Fed’s announcement, BlackRock, the world’s largest asset manager, made a discreet move in its crypto strategy that analysts at Citi believe could create a “$5 trillion market by 2030,” as reported by Forbes.
Earlier this year, BlackRock launched a spot Bitcoin exchange-traded fund (ETF), which has attracted significant inflows. Now, the firm has unveiled its maiden tokenized fund on the Ethereum blockchain, known as the BlackRock USD Institutional Digital Liquidity Fund (BUIDL).
The fund offers qualified investors the opportunity to earn yield on the U.S. dollar through investments in cash, U.S. Treasury bills, and repurchase agreements, all designed for a low-risk strategy. It aims to maintain a stable value of $1 per token and automatically distributes dividends to investors’ wallets.
Tokenization of the fund shares enables the traditional assets to be launched on a public blockchain, providing advantages such as enhanced transparency, immediate settlement, and seamless transferability.
Shortly after its identification on the blockchain, the fund’s wallet garnered over $100,000 worth of memecoins, reflecting the cryptocurrency community’s enthusiasm for the entry of major institutional players.
BlackRock’s IBIT spot Bitcoin ETF has experienced explosive growth, accumulating $15.5 billion in assets under management in just three months, making it one of the quickest-growing ETFs ever launched.
This development comes following CoinShares Chief Strategy Officer Meltem Demirors’ observation several months ago that eight financial powerhouses, including BlackRock, Fidelity, JP Morgan, Morgan Stanley, Goldman Sachs, BNY Mellon, Invesco, and Bank of America, were actively working to facilitate access to Bitcoin and other cryptocurrencies.
With these industry giants managing a combined $27 trillion in assets, even a fraction of this colossal sum finding its way into cryptocurrency investments would have a significant impact.