Original author: Heimi@Bai Ze Research Institute
If BlackRock's Bitcoin spot ETF application is approved, it could trigger a new round of cryptocurrency craze, with trillions of dollars of institutional funds pouring into the market, causing the prices of BTC and altcoins to rise sharply.
This article will take a look at some of the projects that could directly benefit from BlackRock’s Bitcoin spot ETF.
Note: This article is only for information sharing. The author has no interest in the project mentioned and does not endorse it.
Why is BlackRock able to exert such tremendous energy?
Blackrock is the world's largest asset manager, currently managing approximately $9 trillion in assets.
This month, BlackRock's move to apply for a Bitcoin spot ETF against the trend was seen as proof that "institutions are re-entering the crypto market."
In simple terms, let's say you want to invest in Bitcoin. Instead of signing up for a cryptocurrency exchange, depositing funds to buy Bitcoin, and paying taxes on each transaction, you buy BlackRock's Bitcoin Spot ETF, and they do all of this for you. You receive a receipt to prove your ownership of the ETF, and then track the value and performance of Bitcoin. In addition to managing these Bitcoins using Coinbase Custody accounts, BlackRock can't use your Bitcoins for "evil", all they can do is provide you with a more cost-effective service.
What’s really interesting, however, is BlackRock’s relationship with the U.S. government and the Federal Reserve.
Who did the Fed let manage the troubled assets they took over from Bear Stearns in 2008?
The answer is BlackRock.
In 2020, when the Federal Reserve wanted to buy some corporate bonds to help support the economy, who did it turn to?
The answer is BlackRock.
In 2023, who will the Federal Deposit Insurance Corporation (FDIC) turn to to help count the assets of Signature and Silicon Valley Bank?
The answer is BlackRock.
That’s why Eric Balchunas, senior ETF analyst at Bloomberg, said BlackRock’s application for a Bitcoin spot ETF is “a big deal” for the entire crypto market.
In addition to entering the crypto market through Bitcoin spot ETFs and seizing the traffic and transaction fees brought by Bitcoin transactions, we can also find through the annual report that BlackRock is also interested in the tokenization of RWA (real world assets), especially the tokenization of stocks and securities.
What projects might benefit from this?
1. Bitcoin L2 ecosystem led by Stacks
Stacks can be said to be the most prosperous Bitcoin L2 network in the current ecosystem.
Similar to the Rollup L 2 network designed to expand Ethereum, Stacks also packages multiple transactions into a batch and submits them to the Bitcoin network for verification, thereby effectively reducing the number of transactions on the Bitcoin network and improving overall performance.
Stacks uses the Proof of Transfer (PoX) consensus mechanism. Miners need to spend Bitcoin to mine the native token STX, which allows Stacks to borrow the security of the Bitcoin network and also allows Bitcoin to be used on dApps in the Stacks ecosystem. (It is worth noting that STX is the first token approved by the U.S. Securities and Exchange Commission in 2019)
As the Bitcoin NFT protocol Ordinals kicked off the explosion of the Bitcoin ecosystem and transaction fees soared, Stacks once again returned to the public eye. The popularity has continued to rise in the past two months, and the price of STX has risen by more than 4 times in more than a month.
Therefore, the approval of BlackRock’s Bitcoin spot ETF could provide a boost to STX and the broader Bitcoin L2 ecosystem.
In addition, Stacks will introduce five important features in its latest upgrade Nakamoto in Q4 2023, which is expected to become an additional catalyst for STX prices, including sharing network security with Bitcoin and creating a decentralized Bitcoin-pegged coin SBTC.
2. BlackRock mentioned the project: Energy Web
Energy Web is an organization dedicated to accelerating the decarbonization of the global economy through open source software and blockchain solutions, focusing on two key challenges: achieving more efficient and sustainable grid balancing using distributed assets such as solar systems, batteries, electric vehicles, and charging stations; and bringing transparency to the supply chain of emerging green products such as sustainable aviation fuel. The organization has signed deals with several large energy producers and fossil fuel companies over the years, including listed companies Shell and Volkswagen.
Its mainnet Energy Web Chain was launched in 2019. It is an EVM enterprise-level public chain that uses the Proof of Authority (PoA) consensus mechanism. Blocks and transactions are verified by pre-approved participants (usually partner companies) who act as managers of the system. However, both enterprises and individual developers can deploy dApps on the network, such as DeFi with energy trading as the theme, and any user can use it. However, its native token EWT only serves as the most basic validator reward and Gas token, and is not given more utility.
This month, the organization announced that it would launch a Polkadot parachain called Energy Web X, which is easiest to understand as two blockchains sharing a token. The idea of Energy Web X is simple, which is to add a utility to EWT - allowing anyone to gain trust by staking tokens, become a working node, and earn token rewards for running computing work for energy companies. Small token holders can stake their tokens to trusted nodes to earn returns.
It is worth noting that when BlackRock launched its Bitcoin Private Trust last year, it mentioned that Energy Web was helping to increase the transparency of Bitcoin green mining. After the press release was issued, the price of EWT tokens rose by 24%. Therefore, the approval of BlackRock's Bitcoin spot ETF may play a positive role in Energy Web, the largest decentralized energy ecosystem, and the adoption of more energy companies will further promote the price of EWT.
3. BlackRock’s Interested RWA Track: Polymesh, Realio Network
As mentioned in the first part of this article, BlackRock is interested in tokenizing RWAs.
Polymesh is an institutional-grade L1 network tailored for regulated assets such as security tokens. The token standard is inspired by ERC-1400, providing more functionality and security to facilitate the issuance and management of on-chain assets. Transparency and compliance are one of the highlights of the network, and all issuers, investors, pledgers, and node operators need to complete identity authentication.
POLYX is the native token of Polymesh. According to the guidance of FINMA, the Swiss financial regulator, POLYX is classified as a utility token in accordance with the country's laws. POLYX has multiple utilities such as staking, governance, creation and management of security tokens.
Realio Network was formerly a P 2 P digital asset issuance and trading platform focusing on real estate private equity investment. It has currently established an interoperable and scalable L 1 network based on Cosmos SDK, focusing on the issuance and management of RWA tokens, and also provides KYC/AML compliance, investor certification and other tools to meet compliance requirements.
Currently, its flagship product, Realio.fund investment platform, has been launched, providing multi-chain token issuance tools, fully automated compliance processes and other functions, through which users can invest in cryptocurrencies more safely.
Realio Network adopts a dual-token proof-of-stake model, RIO and RST, with multiple utilities such as staking, governance, and key management.
As the two most powerful projects in the RWA track, Polymesh and Realio Network are bound to benefit from the wave brought by the approval of BlackRock's Bitcoin spot ETF.
4. The strong will always be strong: Take Render and GMX as examples
If BlackRock's Bitcoin spot ETF application is approved, it could trigger a new round of cryptocurrency craze, and projects that have performed well this year, such as Render and GMX, could benefit from it.
Render Network is a blockchain-based GPU rendering network that aims to connect idle GPUs with creators who need additional GPUs to maximize resource utilization. As an infrastructure, rendering has huge business scalability. It is also part of the narrative of artificial intelligence and the metaverse, so it is one of the benchmarks in the Depin (distributed physical infrastructure network) track.
Its native token RNDR is one of the strongest rising tokens this year and has completed a good rebound in the bear market. The reason may be the partnership between its parent company OTOY and Apple. Apple's official product promotion video has repeatedly appeared the Render Network logo. Recently, RNDR adopted a new token economics model "burn and mint" (BME), making it a highly deflationary token, which may become a catalyst for its price to continue to rise in the future.
With the US SEC suing centralized cryptocurrency exchanges Coinbase and Binance this month, perpetual DEX is gaining more users. Traders trying to get rid of CEX and KYC are looking for a "new home" in the perpetual DEX track.
Leading project GMX, which has a total trading volume of over $133 billion, is likely to continue to grow as a result.
risk warning:
According to the "Notice on Further Preventing and Dealing with the Risks of Virtual Currency Trading Speculation" issued by the Central Bank and other departments, the content of this article is for information sharing only and does not promote or endorse any business or investment activities. Readers are requested to strictly abide by the laws and regulations in their area and not participate in any illegal financial activities.
