BlackRock Closes in on Crown of World’s Largest Bitcoin Fund

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In a dramatic shift from skepticism to leadership, BlackRock is rapidly ascending as a dominant force in the digital asset space. Once dismissive of cryptocurrencies, the financial giant is now on the verge of overtaking Grayscale to become the manager of the world’s largest bitcoin fund. This transformation reflects a broader industry evolution — one where institutional confidence in blockchain technology and digital assets is accelerating at an unprecedented pace.

A Strategic Pivot Toward Digital Assets

BlackRock’s spot bitcoin exchange-traded fund (ETF), launched just four months ago, has already amassed $16.7 billion in assets under management. This staggering growth places it within striking distance of Grayscale’s Bitcoin Trust, which holds a narrow lead despite a decade-long head start and $28 billion in early investment.

This meteoric rise underscores a fundamental change in institutional sentiment. Only seven years ago, BlackRock CEO Larry Fink famously labeled bitcoin “an index of money laundering.” Today, he champions its role in what he calls “the technological revolution in the financial market,” viewing bitcoin not as a speculative fad but as a foundational element of future financial infrastructure.

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Why BlackRock’s Entry Matters

The approval of spot bitcoin ETFs by the U.S. Securities and Exchange Commission (SEC) in January 2025 marked a watershed moment. BlackRock emerged as the biggest beneficiary, leveraging its brand trust, global distribution network, and low fee structure (0.25%) to attract massive inflows.

Fidelity follows in third place with $9.3 billion in assets, while Grayscale has seen significant outflows — largely due to its previous 1.5% management fee, which now appears uncompetitive. As investors pivot toward lower-cost, SEC-compliant products, BlackRock’s strategic pricing and institutional credibility have given it a decisive edge.

But BlackRock’s ambitions extend far beyond bitcoin ETFs.

Tokenization: The Next Frontier

Beyond crypto-backed funds, BlackRock has launched the fastest-growing tokenized U.S. Treasury fund — BUIDL (BlackRock USD Institutional Digital Liquidity Fund) — built on the Ethereum public blockchain. With over $382 million in assets, BUIDL has surpassed Franklin Templeton’s competing product to become the largest tokenized fund in the market.

Unlike traditional stablecoins such as USDC or USDT, BUIDL offers yield-bearing collateral, making it increasingly attractive to crypto hedge funds and prime brokers who require high-quality assets for trading and lending.

“Traders are beginning to use BUIDL as collateral because it combines regulatory clarity with real yield,” explains Robert Mitchnick, BlackRock’s head of digital assets. “This is not just about digitizing money — it’s about reimagining how capital moves.”

Building an Institutional-Grade Ecosystem

BlackRock’s strategy isn’t impulsive; it’s the result of years of deliberate development. Two years ago, the firm took a minority stake in Circle, issuer of the USDC stablecoin. More recently, it joined a $47 million funding round for Securitize, a platform that tokenizes real-world assets like private equity and bonds. Joseph Chalom, BlackRock’s global head of strategic ecosystem partnerships, now sits on Securitize’s board.

These moves signal a long-term vision: to bring institutional-grade infrastructure to decentralized finance (DeFi). By investing in interoperable platforms and compliant tokenization standards, BlackRock aims to bridge traditional finance (TradFi) with Web3.

“This isn’t about chasing trends,” said Rob Goldstein, COO of BlackRock. “It’s about applying the same rigor and quality we’ve built over decades to this new ecosystem.”

The Road to Faster Settlements

One of the most compelling arguments for blockchain adoption lies in settlement efficiency. Currently, most U.S. securities trades settle in two business days (T+2). Starting next month, this will shrink to T+1 — but many executives believe even that won’t be enough.

“Settling in minutes instead of days is inevitable,” said Ralf Kubli, board member at the Casper Association, a Swiss blockchain initiative. “Large asset managers are thinking deeply about how blockchain can solve systemic inefficiencies.”

BlackRock tested this concept earlier using JPMorgan’s private blockchain to digitize transactions in a money market fund. That pilot laid the groundwork for BUIDL’s deployment on a public chain — a bold step toward transparency and real-time settlement.

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FAQs: Understanding BlackRock’s Digital Asset Strategy

Q: Why did BlackRock change its stance on bitcoin?
A: Rising client demand and maturing regulatory frameworks prompted a strategic reassessment. While initially skeptical, BlackRock now sees digital assets as part of a broader technological shift in finance.

Q: What makes BUIDL different from other stablecoins?
A: Unlike USDC or USDT, BUIDL is backed by U.S. Treasuries and generates yield. It operates on Ethereum, offering transparency and programmability while maintaining compliance.

Q: Is BlackRock investing its own capital in crypto?
A: No — according to experts like Lee Reiners from Duke University, crypto remains off BlackRock’s balance sheet. The firm provides access to clients without taking direct exposure.

Q: Can retail investors buy into BUIDL?
A: Currently, BUIDL is available primarily to institutional investors through select platforms. Broader access may come as regulations evolve.

Q: How does tokenization benefit traditional finance?
A: Tokenization enables faster settlement, 24/7 market access, improved liquidity, and automated compliance through smart contracts — all critical upgrades over legacy systems.

Q: Will more asset managers follow BlackRock’s lead?
A: Many are watching closely. While firms like Vanguard remain cautious, others are exploring tokenization pilots. BlackRock’s success could catalyze wider industry adoption.

The Future Is Tokenized

BlackRock’s journey from critic to leader in digital assets illustrates a pivotal shift: institutional finance is no longer resisting blockchain — it’s building on it. From bitcoin ETFs to yield-generating tokenized Treasuries, the firm is laying the foundation for a more efficient, transparent, and accessible financial system.

As settlement times shorten and blockchain integration deepens, the line between traditional and decentralized finance will continue to blur. And with every milestone — whether surpassing Grayscale or expanding its tokenized product suite — BlackRock reinforces its position not just as an asset manager, but as an architect of financial innovation.

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