According to Cointelegraph: The market for tokenized United States Treasurys is on track to surpass $3 billion in market capitalization by the end of 2024, driven by increased global crypto adoption and attractive treasury yields. As more crypto investors seek stable, low-risk digital assets, tokenized US Treasurys are emerging as a popular choice within the digital asset ecosystem.
Since the beginning of 2023, the market capitalization of tokenized US Treasurys has surged by over 150%, reflecting a significant uptick in demand. This growth trend is expected to continue, with Cointelegraph’s analysis using three different statistical models—Autoregressive Integrated Moving Average (ARIMA), Generalized Autoregressive Conditional Heteroskedasticity (GARCH), and linear regression—projecting varied outcomes for the market’s future size.
According to the models, the market capitalization of tokenized US Treasurys could range from $2.12 billion (bear case) to $3.93 billion (bull case) by the end of 2024. A weighted combination of these predictions suggests a base-case scenario of approximately $2.66 billion.
Decentralized autonomous organizations (DAOs) have recently shown increased interest in tokenized US Treasurys, potentially driving further capital influx. Notably, Arbitrum and MakerDAO have announced plans to invest in these tokenized bonds, with MakerDAO allocating around $1 billion—19% of its treasury—toward such assets. This trend could encourage other DAOs, many of which currently lack stablecoin reserves, to consolidate their treasuries with real-world assets, including tokenized bonds, to ensure long-term financial stability.
As of July 30, the total value of DAO treasuries was approximately $24.3 billion. If DAOs were to allocate between 1% and 10% of their treasuries to tokenized US Treasurys, the market could see additional inflows ranging from $243 million to $2.43 billion, representing an increase of 13% to 31% from the current market cap of $1.85 billion.
While the demand for tokenized US Treasurys is expected to grow, the market faces potential challenges as the Federal Reserve is anticipated to begin cutting interest rates in September. The rate cuts, which could bring rates down to 4.25%–4.5% by December, may reduce the attractiveness of US Treasurys as an investment, especially in an environment of lower rates but persistent inflation.
In summary, the market for tokenized US Treasurys is poised for significant growth, potentially reaching $3 billion by the end of 2024, as DAOs and crypto investors increasingly seek stable, yield-bearing investments. However, the market's trajectory will depend on broader economic conditions and the Federal Reserve's monetary policy decisions.
