In an unexpected sequence of events, Tuesday’s early hours saw the decentralized ledger platform Hedera’s native token, HBAR, experience a substantial price surge. HBAR, originating from a low of $0.0875, shot up to crest at the $0.1821 mark by Wednesday—a dramatic increase exceeding 100%.
The remarkable escalation was triggered by news of BlackRock’s tokenized fund, BUIDL, sparking high hopes among HBAR investors for potential cooperation between the eminent asset manager and the Hedera protocol.
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In March of 2024, BlackRock launched BUIDL, which operates as a tokenized fund on the Ethereum blockchain and yields US dollar profits through tokenization. A confusing announcement initially led investors to presume that BlackRock would directly tokenize the fund on the Hedera network, thereby stimulating a major upswing in the HBAR price.
Upon studying the announcement in depth, it became clear that there was no direct connection between BlackRock and Hedera, although the initial overreaction to the news was rather significant. Crypto analysts going by the alias “CrediBull” on the social networking platform X—formerly known as Twitter—clarified the situation, highlighting that BlackRock’s explicit permission wasn’t required to list tokenized versions of its funds.
BlackRock’s choice to tokenize on Hedera was not deliberate. Instead, an already-existing platform on the network took it upon itself to tokenize one of BlackRock’s funds. The analyst noted that this act, rather than reflecting a direct alliance between Hedera and BlackRock, instead emphasized Hedera’s leadership position in the blockchain space.
Delving deeper reveals Archax to be the party behind the tokenized BlackRock fund on Hedera. Noteworthy is that Archax is an ABRDN Investments portfolio company, the UK’s largest asset manager, steward of approximately $500 billion in AUM. CrediBull points out that BlackRock holds a significant position as the fourth-largest shareholder of ABRDN. Intriguingly, before launching the BlackRock fund, Archax tokenized one of ABRDN’s money market funds about ten months ago.
ABRDN’s Head of Digital Assets clarified some of the mystery surrounding the tokenization process on Archax in an interview. A “distribution agreement,” which greenlighted the procedure, had been signed. If BlackRock were to participate in a similar agreement, it would be viewed as the asset manager’s endorsement of the product.
In conclusion, ABRDN’s head of digital assets interview underscores the reality that significant players back the continual expansion of Hedera, even if they operate from behind the scenes.
Amidst the fog of this narrative, HBAR’s price has contracted to $0.1199, following the situation’s clarification. Despite the corrections, HBAR enjoys an 8% increase over the last 24 hours and shows an impressive near-60% gain over the past week. A marked rise in HBAR’s trading volume, which soared by over 1,100% within the last few days, bears testament to the widespread bewilderment caused by the initial news release, as illustrated by the CoinGecko data.