BlackRock’s BUIDL fund recontextualizes blockchain-based finance, expanding to Solana with a nearly $2 billion market cap.
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The BlackRock USD Institutional Digital Liquidity Fund (BUIDL) is BlackRock’s tokenized money market fund that invests in high-liquidity, dollar-pegged assets. BlackRock partnered with Securitize Markets, LCC, to launch BUIDL on the Ethereum network in March 2024.
100% of BUIDL’s assets are in cash and U.S. Treasury bills, allowing holders to earn yield on their investments as they would in a traditional market. BUIDL targets a value of $1 per token and pays daily accrued dividends each month.
But why utilize blockchain? Why tokenize assets that you are already familiar with?
To start, blockchain networks significantly increase liquidity and accessibility. They operate globally, unifying the otherwise fragmented world of traditional finance (TradFi). Conventional markets involve various intermediaries instead of one unified option, splitting liquidity, while blockchains provide a single global market. Blockchains also function 24/7. This always-on nature removes the limited trading hours standard in TradFi.
Of course, harnessing blockchain technology positions BlackRock at the forefront of financial innovation. With a nearly $2.7 trillion market cap as of April 2025, the world’s largest asset manager was quick to get involved in cryptocurrencies and decentralized technology.
BlackRock is not the first TradFi entity to get involved in digital assets. Over the past few years, the United States Securities and Exchange Commission (SEC) has approved multiple cryptocurrency exchange-traded funds (ETFs), including BlackRock’s own Bitcoin (BTC) and Ether (ETH) funds.
Institutional investors often cite crypto’s volatility and lack of regulatory clarity as primary reasons for not investing in it, but BlackRock’s continual interest aims to address these problems.
And while Bitcoin and Ethereum have historically been the target of institutional investment, Solana appears to be stealing that attention.
BlackRock’s expansion to Solana is far from unprecedented — the fund has previously shown interest in blockchains other than Ethereum. In November 2024, BlackRock expanded BUIDL to Aptos, Arbitrum, Avalanche, Optimism, and Polygon. Since these expansions, the fund has grown to just under $2 billion. Projections expect the Solana expansion to push BUIDL past that mark.
Despite having a significantly smaller market cap than Ethereum, Solana processes transactions at a much faster rate, validating over 1,000 per second compared to Ethereum’s less than 20. Also, Solana transactions are much cheaper — a crucial need for a product expecting high trading volume. In October 2024, the network even surpassed Ethereum in daily fee generation, signaling increased use over its main competitor.
BlackRock’s expansion also aligns with its environmental, social, & governance (ESG) policies. The firm prioritizes sustainable investments, and Solana’s proof-of-history (PoH) consensus mechanism aligns with BlackRock’s energy-efficient approach.
PoH utilizes timestamps via a Verifiable Delay Function (VDF). VDF reduces transaction sizes, lowering the hash power required to validate them. This enables Solana to have speedy transaction times with minimal fees while consuming less energy than Bitcoin or Ethereum.
Above all, Solana is resilient. The network has suffered from various outages over the years, such as a widespread network failure caused by a surge in memecoins in April 2024. Yet, Solana’s pros seem to outweigh its cons as institutional interest increases. Q3 2024 saw $173 million in institutional investments, up 54% from the previous quarter.
It appears that BUIDL delivers strong results for BlackRock, but how has the rest of the crypto market responded?
Solana reacted positively to BUIDL’s integration announcement on March 25th. The asset’s price jumped from around $138 to a peak of $146.97. It maintained this boost for around a day before falling to $136 on March 26th. It dropped to $125 in the following days.
As a whole, the crypto market held steady at around a $2.8 trillion market cap after the BUIDL announcement, though it crashed as low as $2.6 trillion by March 31. The drop was likely in anticipation of US President Trump’s impending tariff announcements. Trump’s announcement, amongst other factors, make it challenging to pinpoint BUIDL’s impact on the market crash.
Despite the slight volatility, BUIDL has experienced a 205.52% increase over 30 days as of April 1st. However, accessibility is a common concern. Only 62 wallets hold BUIDL. The fund’s small distribution raises questions about BUIDL’s target audience — such as if retail investors have any hope of participating.
BlackRock is one of a few TradFi firms leading the charge toward tokenization. It was among the first to receive approval for a spot Bitcoin ETF alongside competitors Fidelity, VanEck, and others in January 2024.
If other TradFi firms were willing to jump into ETFs, there’s no reason to believe they wouldn’t also go for a fund like BUIDL. After all, BUIDL is part of the “real-world asset (RWA) tokenization” movement — a plan to tokenize traditional assets to increase investment opportunities worldwide.
In fact, according to global management consulting firm Roland Berger, tokenized RWAs will exceed 10 trillion in value by 2030. This prediction alone may fuel BlackRock’s interest in tokenization.
Groups like JPMorgan are already experimenting with RWA tokenization. While BUIDL has only been around for about a year, its near $2 billion market cap is a massive milestone. It’s only natural that other groups will follow.
However, TradFi competitors aren’t BUIDL’s only opponent. BUIDL is essentially offering a stablecoin akin to Tether (USDT) or Circle’s USDC. Both investment methods tie to the US dollar, but BlackRock’s advantage against established stablecoins is its transparency.
Tether has faced scrutiny over proof of its asset reserves and has faced delisting in the EU due to non-compliance with Markets in Crypto Assets (MiCA) regulation.
A firm like BlackRock is known for financial security and transparency and should have no problem translating that experience to the world of crypto. This could win the wallets of institutional and retail investors alike.
Speaking of trust in the market, BUIDL’s other opponent is decentralized finance (DeFi). While there are tons of DeFi success stories, there are just as many scams and failures due to the market’s unregulated nature. Bringing a history of good faith and regulatory backing could position BlackRock as the safest option.
BlackRock’s BUIDL initiative could be TradFi’s biggest break into blockchain yet. It represents a massive shift toward tokenization, legitimizing not only long-standing platforms like Ethereum but also younger networks in Solana, Optimism, and Polygon. It’s a proving ground for crypto’s so-called benefits — its 24/7 nature, decentralization, and global liquidity pool.
Should BUIDL succeed in the long-term, tokenization may spread to other industries like real estate, private equity, or even art.
BlackRock chose Solana primarily for its transaction speeds and cost efficiency. The network is much faster and cheaper than Ethereum, accommodating the high-volume trading required for BUIDL to succeed.
BUIDL is backed by short-term U.S. Treasury bills and other high-quality debt instruments. This makes it similar to stablecoins but with the backing and history of the world’s largest asset manager.
BUIDL’s largest potential impact is legitimizing tokenization for mainstream finance. It’s a powerful test for crypto’s claimed benefits, though it remains to be seen if this is for retail or institutional investors.
Undoubtedly. While BlackRock’s close to $2 billion market cap is leading the market by a significant amount, other entities like the Franklin OnChain U.S. Government Money Fund (BENJI) or the Hashnote Short Duration Yield Coin manage hundreds of millions in their own right. BENJI is even or more networks than BUIDL, though it doesn’t have the backing of the world’s largest management fund.
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