BlackRock’s BUIDL fund faces $447M outflow amid tokenized Treasury redemptions surge

BlackRock’s BUIDL fund, a tokenized U.S. Treasury offering, has seen a significant net outflow of approximately $447 million over the past 30 days, marking its largest drawdown since the fund's inception. The redemptions are concentrated in the Ethereum-based BUIDL-I share class (`0x6a9DA2…C89041`) and coincide with outflows from other major Treasury-backed products such as Superstate’s USTB and Circle’s USYC, which saw $287 million and $67 million in redemptions, respectively, during the same period [1].

Despite a record $2.87 billion peak in total value over an 18-month period, BUIDL’s market value has dropped to $2.42 billion as of August 1, reflecting a 15.21% decline in the trailing month [1]. The outflows appear to be driven by large institutional participants, including protocols like Ethena and Ondo Finance, both of which hold substantial BUIDL positions. Ethena’s USDtb stablecoin, backed by BUIDL, allows for rapid redemptions, facilitating large-scale treasury migrations. Ondo’s OUSG Instant Manager wallet (`0x282698…A6A43`) is also linked to monthly BUIDL distributions and may have contributed to the recent outflows [1].

The outflows have also been influenced by the integration of BUIDL as collateral on derivatives platforms such as Deribit and Crypto.com in mid-June. This development has introduced more cyclical liquidity patterns, with redemptions appearing to reflect short-term volatility rather than a structural withdrawal of capital. Additionally, earlier redemption constraints from Circle’s facility may have prompted some allocators to diversify liquidity sources, making BUIDL more susceptible to reallocation based on market conditions [1].

On-chain data confirms that the drawdown is largely confined to the BUIDL-I contract, while the primary BUIDL token contract (`0x7712…8Aa2AEc`) experienced minimal supply changes [1]. This suggests that the outflow is share-class-specific rather than indicative of a broader loss of confidence in the product.

The tokenized Treasury sector as a whole has shown mixed flows. While BUIDL and USTB led outflows, other products like WisdomTree’s WTGXX saw $165 million in net inflows, and Securitize’s VBILL and OpenEden’s TBILL added $22 million and $15 million, respectively [1]. This indicates that although capital has rotated or exited the sector, there remains continued interest in tokenized short-term yield instruments.

The BUIDL fund remains the most valuable instrument in the sector, but its large size has made it particularly sensitive to portfolio adjustments by a small number of major holders. As more platforms enable BUIDL collateralization and redemption mechanisms evolve, future movements may increasingly reflect tactical reallocations rather than shifts in long-term sentiment [1].

Source: [1] BlackRock’s BUIDL fund hit by $447M outflow after 18-month record breaking $2.8B inflow (https://cryptoslate.com/blackrocks-buidl-fund-hit-by-400m-outflow-in-30-days-after-18-month-record-breaking-2-8b-inflow/)