ONDO Price Prediction: ONDO Jumps Above $0.37, But Can Tokenized Stocks Finally Unlock a Bigger Rally?

Quick overview

A major update for Ondo Finance sent the ONDO token surging past $0.37, its first price surge in weeks. The move wasn’t triggered by the recent resurgence of meme coins and other crypto-related assets, but by the launch of a new tokenized-stock system that the company hopes will bring securities closer to the blockchain in a regulated manner.

While the token has had the desired price action, the market has bigger questions for Ondo Finance and the future of the ONDO token. The business continues to expand with new products and partnerships but the ONDO governance token has no claim on platform fees or yields. The outcome may be a determining factor on whether a longer-lasting bull run follows the recent price action.

Ondo Is Building One of Crypto’s Fastest-Growing Real-World Asset Platforms

Ondo’s biggest product launch occurred on July 15 when it rolled out a new tokenized-stock structure. Backed by securities settled via DTC infrastructure in the US, the system is more closely linked to regulated capital markets than many of the tokenized-equities that currently exist.

Rather than simply being an asset that tracks the price of an existing asset, the new structure relies on real-world securities held in a regulated custody environment. Ondo Finance buys stocks and securities on behalf of eligible non-US investors via its US-registered broker-dealer while custodians holding the securities on behalf of outside investors.

The tokenized-stock news builds on Ondo’s earlier partnership with Broadridge, a US-based financial technology firm that allows tokenized securities to be used for things like governance and shareholder voting. It also comes after the launch of the company’s custodial tokenized securities platform, which the company released at the start of the month.

All of these moves are part of a long-term goal of Ondo Finance to provide a compliant, regulated way of interacting with the traditional capital markets and settle on the blockchain in turn. In other words, the goal of the protocol is to become a core piece of infrastructure for trading tokenized securities.

Tokenized Treasuries Continue to Drive Institutional Growth

While the announcement of the new tokenized stock was one of the company’s biggest launches to date, the business’s core remains its tokenized Treasuries products.

As of earlier this year, there were approximately $2 billion in Treasury assets on the Ondo Finance protocol, split between its two main products: USDY and OUSG. The tokens are accessible on different blockchains.

USDY is designed for eligible investors seeking exposure to short-term Treasuries and bank deposits. It distributes daily yield and offers a passive income source to those who use it. OUSG is targeted towards more sophisticated investors and those considered qualified purchasers.

It provides exposure to treasury and money market assets, including the popular BUIDL treasury fund by BlackRock. It also offers 24/7 subscriptions and redemptions.

Ondo’s products for tokenized T-bills continue to see growing institutional adoption given how such tokens allow traditional, sovereign-backed assets to be held within the blockchain network. This enables faster movement of collateral and more flexible, efficient Treasury management.

In May, Ondo was one of several major financial firms to launch a transaction involving the settlement of tokenized Treasuries across the globe. The pilot with JPMorgan, Mastercard and Ripple was an indication of how these kinds of products can interact with the existing traditional finance and banking network.

Ondo Chain Could Become the Next Growth Catalyst

Ondo is currently also planning to launch a blockchain dedicated to the management of tokenized financial products known as Ondo Chain. The proposed network will help manage tokenized products and provide infrastructure that could be used for the issuance of assets, collateral management, lending, cross-chain transfers, and on-chain portfolio management for a variety of tokenized bonds, equities, ETFs and more.

If successful, the Ondo Chain could see increased activity for tokenized assets while creating additional utility for the ONDO token. Institutional use of tokenized securities and other products continue to grow across the market, with various financial firms experimenting with various blockchain solutions.

One thing that is not certain is exactly how increased network usage on the Ondo Chain would be related to the ONDO token.

The Biggest Question Isn’t About Ondo Finance—It’s About ONDO

This is still the most critical question for investors to answer. While Ondo Finance is rapidly scaling its business, ONDO itself isn’t an equity investment in that company. ONDO holders don’t own a slice of the tokenized Treasuries and stocks, nor do they get a cut of the platform revenue or the investment returns.

ONDO really is the governance token for the Ondo ecosystem and enables holders to cast votes for the various protocol initiatives.

In other words, Ondo Finance can grow and bring in billions of dollars in assets, but not necessarily much demand for ONDO in the process.

Investors also need to think about ONDO’s supply size. The total supply of ONDO tokens is fixed at 10 billion units, and there are now 4.87 billion ONDO tokens circulating. More than half of this supply is set to unlock over the coming years all the way to 2029, so the token supply will continue to become diluted unless fresh ONDO buying can soak up the extra supply.

For the price of ONDO to remain higher over the longer term, investors likely want to see stronger proof that Ondo Chain and the new products will create recurring demand for ONDO and aren’t just growing the Ondo Finance business.

ONDO Price Prediction: Bulls Target $0.39 After Powerful Breakout

ONDO is moving near $0.3725 after breaking through a multi-day trading range with a bullish 4-hour close.

The 50 EMA at $0.329 and 200 EMA at $0.333 have been reclaimed, and price is also higher than the 2.0 Fib extension at $0.3704. The next price resistance is at $0.3792, followed by $0.3905 near the 2.618 Fib extension. Beyond $0.3905 price could climb to $0.4029.

The Relative Strength Index is higher than 80, which suggests that the asset could be ready to pull back from this sharp move. But overbought RSI can also indicate strong buying interest after the bullish breakout.

As long as ONDO holds above $0.3704, the technical outlook continues to favor buyers. Any pullback to below $0.358 can mark the start of a trend cooldown after which price can once again try to move higher.

What To Take Away From ONDO’s Rally

• The token price climbed after Ondo Finance launched its tokenized stock platform with regulated securities.

• Tokenized US Treasuries are now Ondo Finance’s strongest business in terms of assets, with around $2 billion in total.

• A blockchain platform called Ondo Chain could become an important new driver of ONDO token value.

• The biggest investor problem is still how Ondo Finance will capture value, because holders of ONDO are not entitled to any ownership stake in tokenized Treasuries, tokenized stocks or the Ondo platform revenue.

• On the charts, price must stay higher than $0.3704 for the next major resistance levels to remain $0.379 and $0.390.

ABOUT THE AUTHOR See More

Arslan Ali Butt

Lead Markets Analyst – Multi-Asset (FX, Commodities, Crypto)

Arslan Ali Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics. His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker. His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.

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