MakerDAO Invests Billions in US Government Bonds
MakerDAO, a prominent decentralized lender in the cryptocurrency space, has made the strategic decision to invest billions of dollars in US government bonds. This move has caused its governance coin, MKR, to reach its highest level since April 2022, outperforming major cryptocurrencies like Bitcoin. MKR has experienced a remarkable surge of 77% this quarter and has nearly tripled in value.
MakerDAO’s Shift to Treasury Bonds
MakerDAO currently oversees $4.6 billion in assets and made the decision in 2022 to convert the backing funds of its stablecoin DAI into assets such as short-term US Treasuries and corporate bonds. This shift aimed to seek more stable yields amidst the downturn in the cryptocurrency markets. Recently, MakerDAO passed a proposal allowing for up to $6 billion investment in short-term Treasuries, doubling the existing limit.
MKR Rally Faces Potential Slowdown
While MKR has seen significant gains, there are signs of a potential slowdown. Data from CryptoQuant shows an increase in MKR tokens held on centralized exchanges, indicating that some traders are preparing to secure profits from the recent surge. Additionally, there was a noticeable drop on September 29, marking the largest decline since mid-September.
Increase in DAI Circulation and Yield Offer
The trader enthusiasm for MKR has extended to DAI, MakerDAO’s stablecoin. DAI’s circulation has grown from $3.9 billion to $5.5 billion, and MakerDAO introduced a limited-time offer of an 8% annual yield to DAI holders. These developments could potentially trigger further buying in short-term Treasuries.
MKR Hits 18-Month High
Although MKR has experienced a recent decline, it has exhibited consistent gains over the last month. It has reached an impressive 18-month high, with a year-to-date surge of 101%. In the short term, MKR has two crucial support levels at $1,430 and $1,341 that bulls must defend.
Hot Take: MakerDAO’s Calculated Move for Stability and Yield
MakerDAO’s decision to invest billions in US government bonds showcases a calculated move to achieve stability and sustainable yields. With its investment strategy and ongoing rally, MKR has the potential to conclude the year as the top-performing asset in the cryptocurrency market.
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