BlackRock’s BUIDL Treasury Fund Faces Its Sharpest Drop Yet

The BlackRock tokenized U.S. Treasury fund, BUIDL, just had its biggest monthly drop since it launched. On-chain data shows that around $447 million was pulled from the fund in the past 30 days. As a result, the fund’s value fell from $2.87 billion to about $2.42 billion, a 15.21% decrease in just one month. Although the overall drop in value is significant, the redemptions were not spread across the entire fund. Not All of BlackRock BUIDL Funds Were Affected Most of the outflows came from a specific share class of the fund known as BUIDL-I, which is built on the Ethereum network. At the same time, the main BUIDL share class saw new inflows. This indicates that investors are not withdrawing from the product entirely. Two major players, Ethena Labs and Ondo Finance, who had previously held big amounts in BUIDL, are reported to be responsible for these major outflows. Earlier this year, Ethena Labs held about $1.29 billion in BUIDL. It uses these funds to back its synthetic stablecoin, USDtb , which allows quick and large withdrawals. Wallets connected to Ondo and possibly Ethena’s reserve accounts show large movements of funds. These changes seem to be part of regular portfolio adjustments. BUIDL’s New Role Sparks Short-Term Moves, Not Long-Term Exit Another reason for the recent outflows could be changes in how BUIDL is used in wider financial markets . In mid-June, BUIDL became accepted as collateral on major trading platforms like Deribit and Crypto.com. This new role brings more short-term trading and risk management into the fund. As a result, the fund might now see more temporary withdrawals around times when trades are settled or contracts end. This kind of short-term movement is normal for financial products used in active trading. Some of the recent redemptions might even be reversed soon, depending on how the market moves. Lastly, some delays earlier this year, like issues with Circle’s redemption system, may also be affecting current trends. During that period, some investors looked for alternative ways to move their funds. Blockchain data supports this view. It was reported that the amount of BUIDL-I dropped significantly between July 1 and August 1, while the primary BUIDL token experienced a slight increase. Other Funds See Mixed Results Beyond BlackRock, the broader market for tokenized U.S. Treasury products showed mixed results during the same period. While BUIDL and a few others, like Superstate’s USTB, Circle’s USYC saw outflows, some funds grew. WisdomTree’s WTGXX gained $165 million, and smaller products like VBILL and TBILL added $22 million and $15 million, respectively. Even with these short-term changes, investors are still clearly interested in tokenized Treasury products. Nevertheless, despite this drawdown, BUIDL, which recently paid out $4.17 million in dividends , remains the largest on-chain Treasury fund. The post BlackRock’s BUIDL Treasury Fund Faces Its Sharpest Drop Yet appeared first on TheCoinrise.com .

Source: The Coin Rise