According to Odaily, a report by Kaiko Research indicates that Federal Reserve rate cuts are unlikely to diminish the appeal of tokenized treasury bonds. BlackRock's on-chain tokenized fund BUIDL, representing the BlackRock USD Institutional Digital Liquidity Fund, is one of many funds launched over the past 18 months, offering investment opportunities in traditional debt instruments such as U.S. Treasury bonds. It has quickly become the largest on-chain fund by assets under management (AUM). The fund was launched in collaboration with Securitize in March 2024 and has since attracted over $520 million in inflows.
Additionally, Ethereum's gas fees have recently dropped to a five-year low, primarily driven by increased Layer 2 activity and the Dencun upgrade in March, which reduced Layer 2 transaction costs. This fee reduction impacts ETH because lower fees mean less ETH is burned, thereby increasing the token's supply. Consequently, since April, Ethereum's total supply has been on the rise. Despite demand drivers like spot ETH ETFs, this growing supply could potentially suppress price increases in the short term.
