Blackrock Enters Onchain Space

The Breakdown First Five - Wednesday, March 20, 2024

Welcome back to The Breakdown First Five — the 5 most interesting and/or important stories in bitcoin, crypto, and markets to start your day.

5. Another Round of Amicis on Coinbase

The traditional wave of amici briefs have poured in to support Coinbase’s demand for crypto rulemaking. Alongside the usual participants like Paradigm and the Crypto Council for Innovation, this time the world's largest business advocacy group, the US Chamber of Commerce, has decided to weigh in. They said the SEC’s approach is “a case study in the dangers of refusing to adapt regulation to new circumstances."

4. Record Outflows

Money is flying out of the Bitcoin ETFs at a record pace. More precisely, $443M fled GBTC and inflows are drying up for everyone else. Bitcoin is down 17.5% so far this week as a billion dollars gets sucked out of GBTC. Grayscale’s CEO says that fees will come down over time. Commentators suggest the firm doesn’t have time and should take emergency action. 

3. Japanese State Pension Studying Bitcoin

The world’s largest pension fund, the Japanese Government Pension Investment Fund is studying Bitcoin. Clocking in at $1.4T in AUM, the fund is looking to assets like Bitcoin and Gold to provide diversification. They said the new interest in Bitcoin was driven by “rapid technological progress.” The study will take 5 years, but should yield world standard investment models, helping the pension industry think more deeply about Bitcoin as an allocation. 

2. Microstrategy Owns 1% of All Bitcoin

Minutes after announcing the sale of $603M in convertible bonds, Microstrategy announced their latest round of Bitcoin buying. They bought $623M at an average price of $67,382, kicking in a little extra cash. The firm now owns 214,246 BTC, above the 21 million Bitcoin supply for the first time. Saylor could have done better by waiting a day, but that doesn’t matter. He says, “I’m going to be buying the top forever. Bitcoin is the exit strategy.” 

1. Blackrock Goes Onchain

Blackrock has filed paperwork for something called the Institutional Digital Liquidity Fund. The naming convention would suggest an institutional grade money market fund with some connection to crypto but details are sparse. Onchain, a matching token contract was deployed last week, implying that Blackrock is using Ethereum for this product. The fund is partnered with Securitize, a major asset tokenization firm. Larry Fink may have begun tokenizing the world.