Courtesy: CoinTelegraph
Increased crypto adoption and high treasury yields could push tokenised US Treasuries toward a $3 billion market cap by the end of 2024.
The rapid growth in global crypto adoption (up 34% based on the number of holders since 2023) has increased the demand for stable, low-risk digital assets. Tokenised United States Treasury's give users access to government bonds within the crypto ecosystem. The figure below illustrates the rapid growth of tokenized products since January 2023, with their total market capitalisation increasing by over 150% year-to-date.
To investigate the sector’s potential market capitalisation by the end of 2024, Cointelegraph’s analysis employed three statistical models: Autoregressive integrated moving average (ARIMA), generalised autoregressive conditional heteroskedasticity (GARCH) and linear regression. The figure below displays the projected capitalisation of the 12 tokenised US Treasury products aggregated.
In summary, CoinTelegraph expects the demand for tokenised US Treasuries to grow as crypto investors seek low-risk, yield-bearing ways to part with their money. However, challenges may arise soon, as the Federal Reserve is expected to start cutting interest rates in September and could reduce them to 4.25%–4.5% by December, down from the current 5.25%–5.5% range. As the market enters an environment with lower rates but sticky inflation, the appeal of US Treasuries as an investment will decrease.