Ethereum ETF sends ONDO soaring 13%: Why and what next?

Spread The Crypto Love

ONDO experienced significant trading activity as metrics suggest a further price increase in the short term.
The TVL of the protocol also jumped, suggesting reinforced trust for the project.

Immediately after the U.S. SEC announced that it had approved eight Ethereum [ETH] spot ETFs, Ondo’s [ONDO] price rallied. Before the approval, the price of the token was $0.92.

However, ONDO’s price has increased by 13.26% in the last 24 hours with the token crossing the $1 psychological area. Well, you might be wondering what connection Ondo has with Ethereum such that the impact of the development was intense.

AMBCrypto would explain. In previous articles, we mentioned how ONDO could be a big beneficiary of the buzzing tokenization of Real World Assets (RWAs) despite decoupling from ETH at one point.

Is ONDO and ETH now a couple?

But besides that, Ondo Finance, the team behind the project, recently moved its assets to BlackRock’s BUIDL tokenization fund. For context, this fund operates on the Ethereum blockchain.

Like Ondo’s offerings, BUIDL allows users to earn yields on their U.S. dollar holdings. Hence, this indirectly makes ONDO which is not an Ethereum L2, a beta of the blockchain.

Interestingly, it seemed some market participants had anticipated the move. Six days ago, on-chain data showed that a trader changed 1,870 ETH for ONDO at an average price of $0.95.

Also, another participant who purchased the token in February still holds the cryptocurrency despite a 288% unrealized profit. An action like this suggests that the token’s price could extend higher than $1.08 in the future.

Furthermore, AMBCrypto looked at ONDO’s volume. At press time, data from Santiment showed that the metric hit a monthly high of $449.50 million.

ONDO's volume increases suggesting that the price might appreciate

Source: Santiment

The increase in volume was proof of rising interest in the token. When placed alongside the price action, the jump suggests that the value of ONDO might rise higher in the short term.

Why the price may be set to hit $2

If this is the case, it could trade at $1.20 soon. However, if the volume falls while the price rises, ONDO’s uptrend could become weak. As such, a decline below the $1 mark could be next especially if profit-taking gets intense.

For the long-term potential, the Total Value Locked (TVL) might play an important role. TVL shows the dollar value of assets locked or staked in the project.

With this metric, one can measure how healthy the protocol is. If the TVL increases, it means liquidity added to the protocol is impressive, indicating a good level of health.

Meanwhile, a decline indicated otherwise. According to DeFiLlama, Ondo Finance’s TVL has increased exponentially and was $438.42 million as of this writing.

This increase suggests that market participants found the project trustworthy, with high expectations of a good yield. Going by the recent increase, the metric could hit $1 billion in a few months.