Hedera’s cryptocurrency, HBAR, witnessed a 96% increase in its value. This surge was triggered by a widely misinterpreted announcement involving BlackRock, the world’s largest asset manager.
The price of HBAR jumped from $0.087 to a peak of $0.175, driven by the excitement around the news that BlackRock’s ICS US Treasury money market fund (MMF) had been tokenized on the Hedera network. At press time, HBAR was trading at $0.1305, indicating a 47.11% increase in the past 24 hours, according to CoinMarketCap data.
HBAR/USD 1-day price chart (Source: CoinMarketCap)
However, it later became clear that BlackRock was not directly involved in the tokenization process. The actual participants were blockchain trading and infrastructure companies Archax and Ownera, who had utilized the Hedera network to tokenize the fund. This clarification led to a significant retraction in the price of HBAR, though details on the final settling price varied slightly among different reporting sources.
Today we witness #RWA history as @BlackRock’s ICS US Treasury money market fund (MMF) is tokenized on @Hedera with @ArchaxEx and @OwneraIO, marking a major milestone in asset management by bringing the world’s largest asset manager on-chain 🏦 pic.twitter.com/1Kye8cjAJx
— HBAR Foundation (@HBAR_foundation) April 23, 2024
Market Response to the Tokenization Announcement
The market’s reaction to the news highlights the volatility and sensitivity of cryptocurrency prices to news and public perception. HBAR’s trading volume surged to $2.69 billion in the 24 hours following the announcement, as reported by CoinMarketCap. The initial misunderstanding was propelled by a post from the Hedera Foundation that seemed to suggest a direct partnership or involvement from BlackRock in bringing their fund “on-chain.”
This situation was further amplified by the rapid sharing and commentary on social platforms, with influential crypto figures discussing the perceived partnership. The Hedera Foundation’s promotional video, which suggested collaboration between Ownera, Archax, and BlackRock, was a significant factor in the misinterpretation, garnering over 2.1 million views and extensive reposts.
Clarification and Community Reaction
As the real details of the tokenization came to light, notable figures within the cryptocurrency community voiced their concerns about the misleading nature of the initial announcements. Chris O’Connor, the founder of the Cardano Ghost Fund DAO, criticized the Hedera Foundation for what he viewed as deceptive marketing practices.
O’Connor emphasized that BlackRock’s involvement was limited to being merely “aware” of the tokenization that used Hedera’s blockchain rather than being an active participant.
#Cardano fam, it gets so tiresome!
To be clear. Blackrock the actual institution did NOT select HBAR for tokenizing a fund of theirs. Blackrock had no involvement whatsoever and has no connection to the protocol.
What did happen was a HBAR project through the secondary market… https://t.co/0IeFo0xUPv
— Chris O (@TheOCcryptobro) April 23, 2024
Industry leaders’ clarification and further investigation into the details of the announcement contributed to a more tempered understanding among investors and observers. Archax co-founder and CEO Graham Rodford later confirmed that the decision to tokenize the BlackRock fund on Hedera was solely at the discretion of Archax and Ownera.
Future Outlook for Hedera and HBAR
Despite the rollercoaster of price movements and the ensuing clarification, Hedera’s outlook remains optimistic among its supporters. The Hedera Global Governing Council recently approved the allocation of 4.86 billion HBAR, valued at approximately $408 million, for further network development. This funding is expected to bolster Hedera’s infrastructure and expand its user base into 2024.
In 2023 alone, the Hedera network processed over 33 billion transactions, showcasing its capability and the growing interest in blockchain solutions. While HBAR is currently trading well below its September 2021 high of $0.57, the recent events have renewed interest and discussion around Hedera’s technological offerings and their potential impact on the broader financial and technological landscapes.
