Crypto market data analytics firm Kaiko Research is warning that one real-world asset (RWA) project could remain bearish for two main reasons.

In a new report, Kaiko Research says that Ondo Finance (ONDO) is losing momentum after the hype around RWA projects has died down.

The firm also warns that expected Fed interest rate cuts in September could further dry up investment inflows into Ondo Finance.

CME’s FedWatch Tool indicates that 67.5% of traders and investors are expecting the Fed to cut interest rates by 25 basis points next month.

“Most of these funds invest in short-term US debt instruments. Other top funds include Franklin Templeton’s FBOXX, Ondo Finance’s OUSG and USDY, and Hashnote’s USYC. Each fund offers yields in line with the Fed funds rate.

As the hype around these tokenized funds rose, both on-chain flows and the secondary market for related tokens saw increased activity. Ondo Finance’s governance token, ONDO, experienced the largest trading surge, coinciding with its collaboration announcement with BlackRock’s BUIDL.

ONDO’s price hit a record high of $1.56 in June amid soaring BUIDL inflows and rising interest in on-chain funds.

However, hype has since waned, and inflows may face headwinds as the US rate environment changes.”

Ondo is trading for $0.67 at time of writing. The 77th-ranked crypto asset by market cap is down 1.8% in the last 24 hours.

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