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21Shares analyst predicts that tokenized government securities could reach 10% market share.
BlackRock’s USD Institutional Digital Liquidity Fund, known as BUIDL, has surpassed Franklin Templeton’s Franklin OnChain US Government Money Fund (FOBXX), to become the world’s largest equity tokenized fund, with $375 million in assets under management (AUM) as of April 30, according to data from Dune Analytics.
As of April 28, Franklin Templeton’s FOBXX held the previous top position with $376 million in AUM while BlackRock’s BUIDL was close behind with $349 million in AUM.
The growth comes just six weeks after BUIDL’s debut. The AUM gap between BUIDL and FOBXX widened to $8 million, with BUIDL taking the lead.
BlackRock launched BUIDL in partnership with Securitize in March 2024. The fund captured over $240 million in its first week. Last week, BUIDL attracted $70 million, including a significant $50 million from its OUSG token product, Ondo Finance. Meanwhile, FOBXX experienced a 3.7% decrease in its AUM.
The tokenization of real assets is heating up following BlackRock’s participation. Last week, Franklin Templeton announced that it has enabled direct shareholder transfers of FOBXX shares on the public blockchain, a move seen as the fund’s efforts to hold its leading position in the market.
Tokenized government securities gain momentum in the asset market
In a recent post on X, 21Shares analyst Tom Wan suggested that tokenized government securities could grow in their share of the total tokenized asset market, moving from about 1% currently to over 10%.
4/ Prediction: Tokenized Government Securities will increase its dominance from 1% to 10%+
In Jan 2023, Tokenized government securities only accounted for 0.1% of the total tokenized value. Today, it represents ~1.4% of the total tokenized value.
Stablecoin issuer using BUIDL… pic.twitter.com/MdbzwTwngE
— Tom Wan (@tomwanhh) April 30, 2024
According to Wan, the current demand for tokenized traditional financial assets is not strong. Even among investors who are familiar with crypto, there is a hesitancy to invest in tokenized equities due to low liquidity.
Despite these challenges, there’s a better outlook for tokenizing assets like US Treasuries because there’s already remarkable demand within the crypto space, Wan noted.
3/ US Treasury is positioned for Tokenization
As mentioned, the key issue of tokenization is bootstrapping demand and liquidity. Given the crypto space has an existing demand for US Treasuries such as Ondo (~$350M), Stablecoin Issuers like Circle/Tether/Mountain protocol… pic.twitter.com/l36z1gS8N7
— Tom Wan (@tomwanhh) April 30, 2024
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