As a seasoned researcher with over two decades of experience in the financial industry, I have seen my fair share of market fluctuations and trends. The recent surge in Ondo Finance (ONDO) has caught my attention, particularly given its collaboration with industry giants like Blackrock and Securitize. The proposal to bring the OUSG stablecoin to Sky, formerly MakerDAO, adds another layer of intrigue to this already captivating story.
After the Ondo Finance team proposed introducing their stablecoin, OUSG, onto the Sky platform (previously known as MakerDAO), the value of their token began to rise again.
Ondo Finance’s price, represented by ONDO, increased for the second day in a row, peaking at $0.7500, which is its highest point since August 25th.
According to statements made by Ondo Finance’s team, they worked together with Blackrock and Securitize to include the OUSG proposal within the Spark Tokenization Grand Prix. The objective of this competition is to bring in a total of one billion dollars worth of tokenized assets.
Contrary to popular belief, decreasing interest rates can actually benefit Yield Coins, rather than harm them. Some people believe that investors will seek out riskier investments such as corporate bonds, private debt, or cryptocurrency lending due to lower interest rates on tokenized Treasuries (Yield Coins). However, this is not always the case…
— Nathan Allman 🌊 (@nathanlallman) September 20, 2024
The OUSG, or Ondo’s Utility Stake Group, is a digitally represented financial product boasting more than $227 million in assets. Holders of this product receive periodic rewards on a monthly basis.
This fund’s yearly return rate is 5.11%, sourced from U.S. government securities via the Blackrock USD Institutional Digital Liquidity Fund. Accessible to institutional investors, it carries a management fee of 0.15%.
Apart from managing OUSG, Ondo Finance additionally handles a widely used U.S. dollar return token, offering a rate of 5.35%. Notably, this token, referred to as USDY, caters exclusively to institutional investors, unlike the OUSG that is accessible more broadly.
As a crypto investor, I found myself in an exciting position recently, as the total holdings in Ondo Finance surged to a staggering new peak of $616 million. The lion’s share of these assets can be found within the Ethereum chain, with Solana, Mantle, and Aptos making up the rest of the portfolio.
A key concern for Ondo Finance is that it could lose assets as investors move away from government bonds now that the Federal Reserve has started cutting interest rates.
Last week’s Fed decision saw a significant reduction of 0.50%, with indications of further cuts possibly on the horizon. Consequently, the 10-year benchmark yield has fallen back to 3.7%, having dropped from this year’s peak of over 4.6%.
Contrary to the notion that reduced interest rates prompt a shift toward riskier investments, Ondo Finance’s CEO, Nathan Allman, disputes this idea. In a recent discussion on X platform, he pointed out that yield tokens such as Ondo become more attractive when interest rates decrease, as investors turn to riskier assets like cryptocurrency. He referenced the USDC stablecoin, which experienced a significant increase in assets under management when the Federal Reserve started lowering rates in 2020.
Contrary to popular belief, decreasing interest rates can actually benefit yield coins rather than harm them. Some may argue that with lower rates, investors would gravitate towards riskier investments such as corporate bonds, private credits, or cryptocurrency lending. However, this…
— Nathan Allman 🌊 (@nathanlallman) September 20, 2024
Ondo flips the 50-day moving average
Earlier this month, the value of Ondo tokens dipped to $0.54, mirroring a general pullback in most cryptocurrencies. However, it has since rebounded, surpassing its 50-day moving average and the 61.8% Fibonacci retracement level.
The RSI (Relative Strength Index) and MACD (Moving Average Convergence/Divergence) are both trending upwards, indicating that the token’s momentum is increasing.
As a crypto investor, I’ve noticed an uptick in trading activity in the spot market recently. Moreover, the open interest in the futures market has climbed to a significant peak of $107 million, a level not seen since August 25. This indicates increased involvement and confidence in the market among both short-term traders and long-term investors.
Based on this trend, it’s plausible that Ondo will persistently increase, and the potential next stop might be the 50% retracement mark situated at approximately $0.8392.
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2024-09-24 17:43