BlackRock’s BUIDL surpasses $2.1 AUM on Ethereum, as risk-off sentiment rises

BlackRock’s BUIDL fund has seen rapid growth in the past few weeks, showing growing recognition of blockchain’s role in tradFi.

The investor appetite for blockchain-based securities is growing, despite a market downturn. On Friday, April 11, BlackRock’s BUIDL fund surpassed $2.1 billion in assets under management on Ethereum ( ETH ). These funds account for 90.5% of all BUIDL tokens across the seven chains it supports.

The BUIDL fund has seen rapid growth in the past few weeks, rising from around $500 million in AUM to its current level of over $2 billion. Interestingly, this growth began just as fears over the ongoing trade war were rocking the markets.

As stocks and crypto took a tumble, investors looked for safer, yield-bearing instruments like U.S. treasuries. The BUIDL fund, which generates yield through treasuries, was one of the beneficiaries of this shift.

What is more, treasury yields are on the rise, with 10-year U.S. treasuries rising 13 basis points on April 11. While economic uncertainty is causing a panic in the U.S. bond market, especially overseas, higher yields will likely attract domestic investors.

BlackRock’s BUIDL fund leverages blockchain for finance

The growth of the BUIDL fund’s AUM showcases the increasing recognition of blockchain’s potential in traditional finance. Notably, BUIDL tokens are much more akin to traditional financial instruments than altcoins.

Unlike most other crypto tokens, BUIDL tokens are explicitly securities, and regulations apply to their trade. For example, traders must pass a strict KYC process to hold and trade the tokens. They generate yield for holders through investment in U.S. treasuries.

At the same time, the funds benefit from blockchain and asset tokenization, which make them more efficient compared to similar off-chain instruments. The platform boasts instantaneous and transparent settlement, leveraging blockchain tech for that purpose. It also features programmable compliance, with its smart contracts designed to adhere to regulations.