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Tokenization of BlackRock’s Funds on Hedera Leads to Price Surge
BlackRock, a prominent investment firm, made headlines recently when one of its funds was tokenized on Hedera, a distributed ledger reminiscent of a blockchain. This move sparked a significant surge in the price of Hedera’s HBAR token, which skyrocketed by 113% within 12 hours of the announcement, according to CoinGecko. However, as more precise details emerged, and BlackRock distanced itself from direct involvement, the price of HBAR began to drop.
Expanded Offerings on Archax
Digital asset exchange Archax took a step further by expanding its range of tokenized fund shares to include BlackRock’s ICS U.S. Treasury money market fund (MMF). While Archax had previously offered products on both Hedera and Ethereum blockchains, this new offering appears to be exclusively on Hedera.
Despite the prominent mention of BlackRock in the initial announcement, the investment giant clarified that it was not directly engaged in the tokenization process. A BlackRock spokesperson communicated to Decrypt via email that they had not collaborated with Hedera and that Archax was the entity responsible for the tokenization and the use of Hedera for distribution.
Clarification and Reaction
The distinction between BlackRock’s involvement and Archax’s initiative was a point of confusion for many. The reaction on social media was swift, with some users erroneously attributing the launch of tokenized funds to BlackRock directly. However, it became clear that this was not the case.
Graham Rodford, CEO and co-founder of Archax, explained on Twitter that the decision to utilize Hedera for tokenization was made by Archax and not BlackRock. Despite this, BlackRock was aware of the process and approved the press release’s wording, according to Rodford.
Impact on HBAR Value
Following these developments, the value of HBAR experienced a significant pullback, declining by 38% to $0.1301 after reaching a 24-hour high of $0.1832. This fluctuation underscored the intricate relationship between market perceptions and tokenization efforts in the cryptocurrency space.
Larry Fink, BlackRock’s CEO, has been a vocal advocate for the tokenization of securities. The firm’s foray into the realm of crypto with initiatives like “BUIDL,” a tokenized asset fund on Ethereum, indicates a shifting landscape where traditional financial institutions are exploring novel avenues for asset management.
It is essential to note that the expressed views and opinions serve informational purposes only and do not constitute financial, investment, or other forms of advice.
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