Two of the most significant developments in the most recent digital financial revolution are the tokenization of US Treasury bonds and the expansion of the Bitcoin ETF market in the US. According to recent data, the total value of tokenized debt instruments has topped $1 billion, indicating a notable increase in the financial sector’s adoption of blockchain technology. The demand for tokenized versions of US Treasury bonds has increased, notably with the rise in Treasury yields over the last two years, according to analyst Tom Wan from the cryptocurrency startup 21.co. The increase in risk-free interest rates, which went from 1.69% in March 2022 to 4.22% in March 2022, is what caused this phenomena.
With a net inflow of $243.4 million, the US Bitcoin ETF market has also experienced notable growth in the meantime. Eleven spot Bitcoin ETFs are available in the US presently, a sign of growing investor interest in digital assets.
The Bitcoin Futures ETF from asset manager Hashdex is one of the most recent entrants, increasing market participants’ investment alternatives. It is anticipated that Hashdex’s move to permit up to 5% of fund assets to be held in Bitcoin futures contracts will improve the precision of BTC price tracking and provide a more reliable fund creation and exchange procedure.
In this context, these phenomena not only reflect the growth of the digital financial market but also mark an important evolution in the adoption of blockchain technology in traditional financial instruments. Thus, it opens opportunities for investors to benefit from these innovations while considering the risks and potential returns.
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