Kaiko Research released a report saying that the Fed's rate cuts are unlikely to limit the appeal of tokenized treasuries. BlackRock's on-chain tokenized fund BUIDL (standing for BlackRock USD Institutional Digital Liquidity Fund) is one of many funds launched in the past 18 months, providing investment opportunities in traditional debt instruments such as US Treasuries. It quickly became the largest on-chain fund in terms of asset management scale (AUM). The fund was launched in March 2024 in partnership with Securitize and has attracted more than $520 million in inflows so far.
In addition, Ethereum's gas fees recently fell to a five-year low, driven mainly by increased Layer 2 activity and the March Dencun upgrade, which reduced Layer 2 transaction fees. This fee reduction has an impact on ETH, as lower fees mean less ETH is burned, thereby increasing the supply of tokens. As a result, the total supply of Ethereum has continued to rise since April. Despite the existence of demand drivers such as spot ETH ETFs, this growing supply may curb potential price increases in the short term.