ONDO Spikes 8% as Major Derivatives Exchanges Mull BlackRock’s BUIDL as Collateral Option

As a seasoned crypto investor with years of experience navigating the volatile digital asset market, I can’t help but feel excited about the recent developments surrounding tokenized money market funds. The news that BlackRock is considering listing its BUIDL token on major exchanges like Binance and Deribit has sent ripples through the crypto community, and it’s hard not to see the potential implications for the broader market.

As a crypto investor, I experienced an 8% surge in the value of my Ondo Finance governance token (ONDO) yesterday, triggered by news that asset management giant BlackRock is aiming to list its tokenized money market fund BUIDL as collateral on leading derivatives exchanges.

Based on Bloomberg’s latest update, BlackRock and their collaborator, Securitize, are having preliminary discussions with major cryptocurrency exchanges such as Binance, Deribit, and OKX about potentially using the token BUIDL as collateral for derivative trades.

After the release of the report, Ondo’s token swiftly rose to 79 cents. Within an hour, it climbed by 8%, but later moderated some of its gains. Over the past day, its price has surged approximately 9%, outpacing the CoinDesk 20 Index’s daily increase of 2.2%.

Although it remains uncertain how the advancement might affect the Ondo platform, its governance token has become a preferred stand-in investment among crypto traders for BlackRock’s tokenization initiative. This token swiftly responds to news concerning the asset management titan. For instance, when CoinDesk announced that BlackRock submitted documents with Securitize to establish the BUIDL offering, the token surged by up to 20%. Similarly, the token reacted when Ondo adopted BUIDL as the foundation for its retail-centric money market fund token (OUSG), enabling instant redemptions and swaps for Circle’s USDC stablecoin.

Tokenized collateral push

The BUIDL token stands as the biggest tokenized offering currently available, boasting more than half a billion dollars in assets. Its price is constant at one dollar, providing money market returns to investors while they remain within blockchain infrastructure. It’s accessible for institutional investors and other protocols, with a minimum investment requirement of five million dollars.

US Treasury tokens, backed by short-term government bonds, have expanded into a $2.3 billion sector within cryptocurrencies, more than tripling in value over the past year. This surge can be attributed to funds, businesses, and protocols utilizing them as a means to store their on-chain funds and generate returns. The potential future growth may lie in gaining acceptance as an on-chain collateral asset.

One way to rephrase the given text is: The charm of these tokens lies in their ability to let traders earn returns while simultaneously using them for security in a trade, rather than providing stablecoins as collateral. Hashnote’s $320 million USYC money market fund token was recently listed on Deribit as an option for cross-margin collateral. Trading services like FalconX and Hidden Road have already started accepting BUIDL tokens as a collateral asset.

In traditional finance, State Street recognizes a substantial opportunity for tokenized collateral assets as well. Donna Milrod, the bank’s chief product officer, recently mentioned in an interview that these collateral tokens could ease liquidity pressures during financial crises by enabling pension funds to post money market tokens instead of selling their underlying assets to cover margin calls and obtain cash.