During the recent weeks of broad-market correction, cryptocurrencies have faced significant declines, leading digital asset investors to turn to tokenized U.S. Treasury products for stability.
According to data from rwa.xyz, the combined market capitalization of Treasury-backed tokens surged by $800 million since late January, reaching a new all-time high of $4.2 billion on Wednesday.
Notably, Ondo Finance’s (ONDO) short-term bond-backed OUSG and USDY tokens saw a 53% increase in market value to nearly $1 billion, while BUIDL, issued by BlackRock and Securitize, grew by 25% to surpass $800 million. Franklin Templeton’s BENJI token also expanded by 16% to $687 million, and Superstate’s USTB reached $363 million, up by over 63%.
However, Hashnote’s USYC experienced a decrease of over 20% in market cap to $900 million, primarily due to DeFi protocol Usual’s decline after investor backlash. This token backs Usual’s USD0 stablecoin, which saw its supply drop below $1 billion from a peak of $1.8 billion in January.
Brian Choe, head of research at rwa.xyz, noted that the growth of tokenized treasury market cap during the recent crypto downturn reflects a flight to quality, similar to traditional investors shifting to U.S. Treasuries during economic uncertainty.
Choe’s analysis compared the market cap growth of tokenized treasuries with stablecoins between November and January, during the crypto rally, and from February during the market correction. Surprisingly, tokenized treasuries grew faster than stablecoins during the bearish period, while stablecoins outpaced treasury tokens during the bullish phase.
Stablecoins grew faster during the crypto rally from November to January, while tokenized treasuries’ growth outpaced stablecoins over the past few weeks. (rwa.xyz)
Choe concluded that this shift indicates investors are not leaving the ecosystem but rather reallocating capital into safer, yield-bearing assets until market conditions improve.
