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After raising $750 million from institutional investors, Blackrock is getting into Crypto, reportedly investing in Circle. Circle’s USDC is the second-largest stablecoin after Tether. It is valued at more than twice as much as Tether. The firm’s SPAC merger is currently delayed due to this funding round. While BlackRock hasn’t elaborated on the specific deal, the company has shown interest in asset tokenization and permissioned blockchains. It reported earlier this year that BlackRock was hiring a blockchain lead. What you need to know about bitcoin mixer and anonymity.
Circle (USDC) raises $400 million
Among the biggest Crypto investors globally, Blackrock has announced that it is investing $400 million in Circle, a leading stablecoin issuer. The funding round is expected to close in the second quarter of 2022. It includes investment managers and financial companies, including Fin Capital. The partnership will allow Circle to explore new capital market applications for the USDC cryptocurrency. BlackRock will act as its primary manager of the currency’s reserves.
The investment is BlackRock’s first foray into digital assets. The company previously owned 7.3% of the publicly-traded bitcoin exchange MicroStrategy, the largest corporate holder of the digital currency, which is worth over $5 billion. It had also purchased several dozen CME bitcoin futures, which are cash-settled contracts based on a once-a-day or daily reference rate based on the U.S. dollar price of bitcoin.
Circle’s (USDC) is the second-largest stablecoin
USDC is the second-largest stablecoin after its predecessor, Tether (USDT). The company that issued it recently integrated it into the Flow network. USDC’s circulating supply now stands at $50.6 billion, a slight deficit from the 84 billion-strong supply of USDT. In addition, Circle announced that its USDC will now be mintable and redeemable on the blockchain.
USDC was launched by Circle Internet Financial, a crypto focused financial technology company, in September 2018. The firm recently announced that it had secured a $400 million funding round that is expected to close by February 2022. Coinbase, BlackRock, and Marshall Wace are among the investors in the round. Circle’s USDC has now become the second-largest stable coin by market capitalization.
While Tether has a larger cash reserve than Circle, it is still far behind its rival. Tether’s cash reserves comprise only 12% of its total. In December, it held $4.2 billion in U.S. dollars. The company invests the cash in tokens, bonds, and commercial paper. This means that the USDC remains liquid until a crisis occurs. If a run on USDC is staged, it could lead to USD T’s peg being eroded and the USDT price falling to zero.
Circle’s ( USDC) valuation is double that of Tether
Insignificant funding round, crypto firm Circle is doubling its valuation to $9 billion as the cryptocurrency industry enters a “coming of age” phase, this move. Blackrock is the primary manager of the cash reserves for the USDC digital currency. The deal, which is expected to close in the second quarter of next year, also entails exploring capital market applications for stable coins.
The investment comes when the price of the Tether cryptocurrency has doubled since it was first launched. It is a testament to the widespread adoption of cryptocurrencies, as Tether has doubled in value in just three years. Meanwhile, Circle has also received funding from Silver Lake, which led a $150 million investment round for Genesis. The company plans to offer a platform for users to mint NFTs and create digital avatars.
Circle’s SPAC merger was delayed because of the funding rounds
A new funding round is underway at Circle Internet Financial, a stablecoin issuer, and renowned crypto company. This round, led by investment managers and financial firms, is expected to close in the second quarter of 2022. The new funding round isn’t likely to change the terms of the company’s SPAC merger with Concord Acquisition Corp. Nonetheless. The new round may help to spur further strategic growth at Circle. As a result, the company’s valuation is expected to double to $9 billion by February 2022.
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While it is unclear how the deal will close, the timing is important. It was initially expected to close by December but may now extend until January 2023. Circle likely wants to access the cash from the SPAC merger as quickly as possible. Circle’s valuation is now more than $9 billion. This funding round should help it achieve its goal of becoming a private company.