- Hedera’s HBAR Hits Yearly High After BlackRock’s MMF Tokenization
- The asset management giant later denied any direct involvement with HBAR.
- HBAR’s consolidation period, which fell more than 90% from its all-time high, has been interrupted.
Hedera Hashgraph (HBAR) has had a rough ride in 2024. The popularity of Hedera’s distributed ledger technology has proven successful in various partnerships with established IT brands such as LG Electronics, IBM, and Google. HBAR also provides real-time tracking devices to two major automakers, Hyundai and Kia.
Why HBAR’s Rally Didn’t Happen
However, one recent high-profile venture has caught the attention of both HBAR holders and critics alike. The HBAR Foundation’s announcement of its effort to tokenize BlackRock’s ICS U.S. Treasury Money Market Fund (MMF) has given way to unfounded excitement, resulting in a massive 60% rally in HBAR on April 24.
The next day, what was supposedly a very bullish move was overshadowed when it was revealed that crypto enthusiasts had misinterpreted an announcement from the HBAR Foundation. BlackRock was not directly involved in the transaction, something that was first pointed out by Cardano’s Ghost Fund DAO founder Chris O’Connor.
While it is true that BlackRock’s MMF was tokenized on Hedera’s chain, this was done through a partnership between the HBAR Foundation and Archax (the first FCA-regulated digital asset exchange and cryptocurrency broker). Archax CEO Graham Rodford later explained that while the broker had opened a BlackRock account to facilitate the tokenization process, BlackRock itself did not provide incentives for commercial transactions with Hedera.
Have the standards for HBAR been lowered?
After BlackRock cleared up the misunderstanding, the HBAR Foundation’s vague announcement was removed from Twitter, but HBAR’s gains quickly faded, falling from its yearly high of $0.176 to its original level in just six days.
This has raised concerns among HBAR holders who had hoped the BlackRock news-fueled rally would be more sustainable than expected. HBAR has been losing ground since late April, and began trading below 5 cents per token in September.
This raises the question of whether HBAR can repeat its success story of reaching an all-time high of $0.56 on September 15, 2021, three years ago. HBAR’s $0.50 price target should be supported by the coin’s trading volume, which remains relatively low at $25 million per day despite it being in the top 30 by market cap.
On-chain metrics like the Chaikin Money Flow (CMF) index are also dropping below zero, but the sharp rise in September shows that a lot of investors’ cash flow is flowing back into tokens.
In addition to the recovering CMF index, the Bollinger Bands (BOLL) of HBAR on the 1-week chart are hinting at impending HBAR price volatility. With the return of large investors, this could ultimately signal a rebound rally, as the support area above $0.05 was successfully reclaimed this week, and the weekly low of $0.045 was rebounded.
At the time of writing, HBAR is trading at $0.0519, up 2.8% in the last 24 hours. However, on a monthly basis, the altcoin is still down 5.3% despite stagnant trading volumes in the spot and derivatives cryptocurrency markets.
On the other side
- HBAR Foundation CEO Shane Higdon resigned on August 31, 2024, three months after the BlackRock MMF scandal surfaced on social media.
- Hedera’s community viewed the move as an attempt at internal clean-up, with many cryptocurrency traders blaming the former CEO for misleading communications.
Why this matters
Real-world asset (RWA) tokenization is estimated to grow to a $10 trillion market by 2030.
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