Hedera’s HBAR Doubles on Misinterpretation of BlackRock Announcement, Then Falls 25%

Crypto 4 24 2024 LearnCrypto Powered By Wyckoff SMI 2024

The market gave back some of its earlier gains after realizing BlackRock wasn’t directly involved in the tokenization on Hedera’s blockchain

Sometimes the use of the passive voice is just clumsy writing; other times it’s a grammatical structure to which investors need to pay close attention.

Hedera announced Tuesday that BlackRock’s ICS U.S. Treasury money market fund had been tokenized on the Hedera blockchain in collaboration with Archax. Hedera supporters on social media jumped to the conclusion that BlackRock chose Hedera to tokenize its fund, and the blockchain’s native HBAR token surged by over 107%.

But while it was indeed BlackRock’s fund that was tokenized, it wasn’t the world’s largest asset manager that did the tokenizing – which could explain why Hedera’s announcement carefully said the fund “is tokenized,” not “BlackRock has tokenized.” Once the market realized this, HBAR slipped 25%.

Archax CEO Graham Rodford said that “it was indeed an Archax choice to put [the fund] on Hedera,” in response to criticism about misleading marketing from Hedera.

HBAR price (CoinDesk data)
HBAR price (CoinDesk data)

BlackRock entered the real-world asset (RWA) tokenization sector last month when it launched its USD Institutional Digital Liquidity Fund on Ethereum.

The HBAR token is still up by 61% over the past 24 hours, but the 2% market depth remains relatively thin, with $900,000 in cumulative bids on the Binance and Upbit order books within 2% of the current price of 14 cents. The token has over $2.6 billion in trading volume over the past 24 hours, according to CoinMarketCap.

CoinGlass data shows that funding rates across all derivative exchanges are heavily negative, which means those holding short positions have to pay those holding long positions, indicating a bearish bias. The ratio of longs and shorts on Binance is currently 0.85.

The weighted short interest, coupled with a lack of liquidity, creates a landscape for a volatile trading period that could culminate in a return to parity or a short squeeze, with open interest having risen by 442% to $160 million in the past 24 hours.

BY: Oliver Knight


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