BlackRock’s BUIDL fund launch on Solana platform while Fidelity files for spot Solana ETF
- Solana price hovers around $142 on Wednesday after recovering by 7% so far this week.
- BlackRock’s BUIDL fund launches on the Solana platform.
- Fidelity files for a spot Solana ETF with Cboe.
Solana’s (SOL) price hovered around $142 at the time of writing on Wednesday after recovering by 7% so far this week. Asset management companies show a rising interest in the Solana platform as the BlackRock USD Institutional Digital Liquidity Fund (BUIDL) fund launches on the Solana platform while Fidelity files for a spot Solana Exchange Traded Fund (ETF) with Cboe Global Markets, bolstering SOL’s bullish outlook.
Asset management companies’ rising interest in Solana
Solana announced on Tuesday that BlackRock’s BUIDL fund, a tokenized money market fund with a total asset value of over $1.7 billion, had been launched on its platform.
Securitize, a blockchain-based tokenization and digital securities solutions company that partners with top-tier asset managers, including BlackRock, KKR, and Hamilton Lane, explains on its X post.
“Solana’s high throughput, low costs, and scalability make it an ideal blockchain to support institutional-grade RWAs. By expanding to Solana, BUIDL is now more accessible to a broader range of investors and applications.”
This partnership with Securitize indicates that Solana is becoming a preferred platform for institutional financial products, which could lead to increased adoption and investment and bolster the bullish outlook for SOL.
During the same period, Fidelity Investments filed for a Solana spot ETF with the Securities and Exchange Commission. The filing was submitted through the Cboe, which uploaded a 19b-4 filing to list the proposed ETF. The filing comes just days after Fidelity registered a Delaware Trust entity for its Solana fund. Fidelity has yet to submit an S-1 filing, which is required for companies seeking to issue new security and be listed on a public stock exchange.
ETF filings by big investment companies are generally positive signs for Solana in the long term, as an ETF can make it easier for traditional investors to gain exposure to SOL without needing to purchase and store the cryptocurrency directly. Moreover, approving an ETF could lend more legitimacy to SOL and increase liquidity.
Crypto ETF FAQs
An Exchange-Traded Fund (ETF) is an investment vehicle or an index that tracks the price of an underlying asset. ETFs can not only track a single asset, but a group of assets and sectors. For example, a Bitcoin ETF tracks Bitcoin’s price. ETF is a tool used by investors to gain exposure to a certain asset.
Yes. The first Bitcoin futures ETF in the US was approved by the US Securities & Exchange Commission in October 2021. A total of seven Bitcoin futures ETFs have been approved, with more than 20 still waiting for the regulator’s permission. The SEC says that the cryptocurrency industry is new and subject to manipulation, which is why it has been delaying crypto-related futures ETFs for the last few years.
Yes. The SEC approved in January 2024 the listing and trading of several Bitcoin spot Exchange-Traded Funds, opening the door to institutional capital and mainstream investors to trade the main crypto currency. The decision was hailed by the industry as a game changer.
The main advantage of crypto ETFs is the possibility of gaining exposure to a cryptocurrency without ownership, reducing the risk and cost of holding the asset. Other pros are a lower learning curve and higher security for investors since ETFs take charge of securing the underlying asset holdings. As for the main drawbacks, the main one is that as an investor you can’t have direct ownership of the asset, or, as they say in crypto, “not your keys, not your coins.” Other disadvantages are higher costs associated with holding crypto since ETFs charge fees for active management. Finally, even though investing in ETFs reduces the risk of holding an asset, price swings in the underlying cryptocurrency are likely to be reflected in the investment vehicle too.
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