Tokenized Treasuries Surge to Record $4.2B Market Cap Amid Crypto Downturn

The crypto market may be experiencing a broad correction, but one digital asset class is bucking the trend - tokenized U.S. Treasuries.

According to data, the combined market capitalization of Treasury-backed tokens has reached a new all-time high of $4.2 billion, up $800 million since late January. This growth in tokenized Treasuries is outpacing even the expansion of stablecoins during the recent crypto downturn.

Analysts see this as a "flight to quality" among digital asset investors, who are shifting capital into safer, yield-bearing assets like tokenized Treasuries amid the market volatility.

Some of the biggest gainers in the tokenized Treasuries space include:

- Ondo Finance's OUSG and USDY tokens, which have surged 53% in market value over the past month to nearly $1 billion combined.

- BlackRock and Securitize's BUIDL token, which has grown 25% to over $800 million.

- Franklin Templeton's BENJI token, up 16% to $687 million.

- Superstate's USTB, which has climbed more than 63% to $363 million.

The only notable exception was Hashnote's USYC, which shed over 20% of its market cap to $900 million, largely due to issues with the DeFi protocol Usual that backs the token.

"We believe the growth of the tokenized treasury market cap during the recent crypto downturn reflects a flight to quality, similar to how traditional investors shift from equities to U.S. Treasuries during economic uncertainty," said Brian Choe, head of research at .

This shift suggests that rather than exiting the crypto ecosystem entirely, some investors are simply rotating their capital into safer, yield-generating digital assets until market conditions improve. It's a trend that highlights the maturing of the crypto market and the growing appeal of real-world asset tokenization.