BlackRock-built Ondo portfolios point to tokenization's next phase, CoinDesk says
In brief
- BlackRock built three tokenized portfolios for Ondo: high income, diversified growth and high growth.
- Each strategy is packaged into a single token, not separately held and separately rebalanced positions.
- Pantera calls the shift a move from single securities to onchain portfolios.
- Bitwise's Automated Token Portfolios instead keep tokenized stocks in investors' own wallets.
- Model portfolios held about $9.8 trillion in June, according to Broadridge.
What BlackRock built for Ondo
BlackRock developed three portfolios for Ondo, with strategies focused on high income, diversified growth and high growth. The idea is simple. An investor doesn't have to buy and rebalance the underlying investments separately; they can hold a single token that represents the whole portfolio.
That token isn't stuck in one place either. CoinDesk reported that an onchain portfolio can move between wallets and platforms and is visible onchain. It could also potentially be used as collateral for borrowing (or plugged into other financial products).
“Tokenization creates new ways for portfolio strategies to be delivered through digital infrastructure,” Lisa O'Connor, BlackRock's global head of model portfolio solutions, said in the announcement.
From single securities to onchain portfolios
According to CoinDesk, most tokenization activity so far has focused on individual assets: Treasury funds, private credit, stocks and ETFs. In a new report, crypto investment firm Pantera described the shift as a move "from single securities to onchain portfolios." Pantera's analysts wrote that the practical change for investors is fewer positions and rebalancing decisions to manage themselves.
There's a lot of money in model portfolios already. Citing Broadridge, CoinDesk reported that model portfolios held about $9.8 trillion in assets in June.
Bitwise is taking a different route. In August it introduced Automated Token Portfolios with Coinbase and a16z-backed Glider, which let eligible non-U.S. investors follow Bitwise-designed portfolios of tokenized stocks while keeping the individual assets in their own wallets. Glider's technology automatically adjusts the holdings to keep them in line with the firm's target weights.
The two products split on one design choice.
Ondo wraps portfolio exposure into a single transferable token. Bitwise leaves the individual tokenized stocks in the investor's wallet and lets software manage the allocation.
What ARK's Staudt sees ahead
In an interview with CoinDesk, ARK Invest president and COO Tom Staudt said tokenization could eventually change both how investors buy funds and what can go into a portfolio. He made the case with some history. Traditional portfolio models were built when everyday investors had far fewer assets to choose from, he said, noting that private equity, private credit and crypto were largely unavailable at the time and international markets were harder to reach.
It's a forecast, and it's his.
Frequently asked questions
What are the Intelligent Portfolios BlackRock worked on with Ondo Finance?
Intelligent Portfolios package professionally constructed investment strategies into individual blockchain tokens. BlackRock developed three portfolios for Ondo, focused on high income, diversified growth and high growth. An investor can hold one token for the whole portfolio instead of buying and rebalancing each underlying investment separately.
How does Bitwise's tokenized portfolio approach differ from Ondo's?
Ondo wraps portfolio exposure into a single transferable token. Bitwise's Automated Token Portfolios, built with Coinbase and Glider, leave the individual tokenized stocks in the investor's wallet. Glider's technology then adjusts the holdings automatically to match Bitwise's target weights.
