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Tokenized Treasury Notes Surpass $2 Billion Market Cap
Explore how tokenized treasury notes have surpassed a remarkable $2 billion market cap, revolutionizing investment opportunities and enhancing liquidity in the financial market. Discover the implications for investors and the future of digital assets.
Tokenized Treasury Notes Surge Past $2 Billion
In a remarkable display of growth, tokenized Treasury notes have reached a significant milestone, crossing the $2 billion mark in market capitalization just five months after first hitting the $1 billion threshold. This surge was reported on Saturday, according to data from RWA.xyz. These tokenized Treasuries serve as digital representations of U.S. government bonds and are tradable as tokens across various blockchains, including Ethereum, Stellar, Solana, and Mantle, among others.
While achieving a $2 billion market cap is certainly noteworthy for these recently launched investment vehicles, the potential for further growth remains vast, especially considering the enormity of the Treasury market, which stands at an impressive $27 trillion.
The driving force behind this year’s skyrocketing market capitalization can largely be attributed to the largest fund in the sector, BlackRock’s USD Institutional Digital Liquidity Fund, known as BUIDL. Launched in late March, BUIDL quickly ascended to become the largest tokenized Treasury fund, reaching a market cap of $375 million just six weeks post-launch. As of now, its assets have increased to an impressive $503 million.
Competitors in this burgeoning space include Franklin Templeton’s OnChain U.S. Government Money Fund (FOBXX) and Ondo’s U.S. Dollar Yield (USDY), both of which have also experienced remarkable growth trajectories.
Notably, much of the recent expansion in market capitalization can be attributed to smaller issuers, as highlighted by rwa.xyz’s data. For instance, Hashnote’s offering has seen a staggering nearly 50% growth, bringing its total to $218 million over the past month. Additionally, products from OpenEden and Superstate grew by 37% and 18% respectively during the same period, with both nearing the $100 million mark in market capitalization.
Tokenized Treasury funds have garnered significant interest from crypto traders seeking to diversify their portfolios while capitalizing on the rapid rise in Treasury yields observed over the past few years. The 10-year U.S. yield currently stands at 3.81%, a substantial increase from 1.5% just four years ago. Similarly, the 2-year yield has risen to 3.92%, up from near-zero levels experienced in 2020 and 2021.