As the cryptocurrency market experiences a significant downturn in recent weeks, investors are turning to tokenized U.S. Treasury products as a safe haven for their digital assets. The total market capitalization of Treasury-backed tokens has surged by $800 million to reach a record high of $4.2 billion, according to data from rwa.xyz.
Ondo Finance’s (ONDO) token products, such as the short-term bond-backed OUSG and USDY tokens, have seen a substantial increase in market value, reaching nearly $1 billion combined. This represents a 53% growth in the past month. Similarly, the BUIDL token, issued by BlackRock and Securitize, has gained 25% to surpass $800 million. Franklin Templeton’s BENJI token has also seen a 16% increase, reaching $687 million, while Superstate’s USTB token has surged by over 63% to $363 million.
One notable exception to this trend is Hashnote’s USYC token, which has experienced a 20% decrease in market capitalization to $900 million. This decline can be attributed to the struggles of the DeFi protocol Usual, which saw a backlash from investors. USYC is the main backing asset of Usual’s USD0 stablecoin, which has dropped below $1 billion in supply from its peak of $1.8 billion in January.
Brian Choe, head of research at rwa.xyz, believes that the growth of the tokenized treasury market during the recent crypto downturn reflects a flight to quality, similar to how traditional investors shift from equities to U.S. Treasuries during times of economic uncertainty. Choe’s analysis compares the market cap growth of tokenized treasuries with stablecoins from November to January, when the crypto markets were bullish, and from February during the correction period.
Interestingly, during the recent bearish period, tokenized treasuries have grown at a faster rate than stablecoins, which is the opposite of what was observed during the bullish phase. This suggests that some investors are not exiting the crypto ecosystem but are instead rotating capital into safer, yield-bearing assets until market conditions improve.
Overall, the rise in popularity of tokenized U.S. Treasury products highlights a growing trend among investors to seek stability and security amid the volatile cryptocurrency market. With the market capitalization of these tokens reaching new heights, it is clear that they are becoming an increasingly attractive option for digital asset investors looking to protect their wealth during uncertain times. There are many ways in which we can improve our daily lives, whether it be through physical exercise, mental health practices, or simply taking time for self-care. In today’s fast-paced world, it can be easy to get caught up in the hustle and bustle of everyday life, but it’s important to remember to take time for ourselves and prioritize our own well-being.
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