Ondo: Huge Crypto Opportunity or Just a Great Story?

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BlackRock, one of Wall Street's biggest names, is already inside of the Ondo products. This is not a rumor, and it's not a secret token buy.

It is in Ondo's own public paperwork. And here's a connection. The US. Treasury is an IOU from the government. You lend it money, it pays you back with interest. Ondo runs a fund called OUSG that holds those IOUs, mostly through other funds. And as of October 9th, there's about $102 million of it. Roughly a third sat in BlackRock's own fund of that kind. This fund is called Biddle. Ondo says that it was the first to put Biddle into its own product back in 24

In the last month, Ondo launched three ready-made investment baskets built on strategies BlackRock developed for Ondo itself. Now, what BlackRock hasn't done, think of it as a supplier of Ondo's shelves, not the store owner. We have found no evidence that it owns or endorses Ondo. The crypto token tied to the Ondo name, Ondo's own documents say that BlackRock doesn't issue these baskets, doesn't hold the money behind them, and has no relationship with the people who hold them. And that's the puzzle. A year ago, Ondo said that his products held over $1.6 billion.

Today, it's almost $4 billion, and its stock tokens alone are up about three and a half times since January.

But the Ondo token, it's not great. It's down almost 30% over the same year, and sitting right under $0.50 right now. So we must ask ourselves, is Ondo a huge crypto opportunity, or just a great story? Let's find out. First, we have to take a look at what Ondo actually sells. Picture a coat check. You hand over your coat, and it goes into the back. You get a ticket. With Ondo, you hand over dollars. Ondo's issuing company buys the real thing, a US stock, and holds it. You get a digital token that tracks the price, and that token is your ticket. Backing a token with a real asset like that is called tokenization. Now, there are three main tickets. USDY, about $2.3 billion.

It's a digital dollar that earns interest from those government IOUs. For non-US investors, OUSG, at about $320 million, is that government debt fund. For wealthy, qualified investors and Ondo Stocks. It's at $1.3 billion and hundreds of US stocks and ETF funds that trade like a single stock with about 245,000 holders. Now, here's where the coat check picture actually breaks. At a real coat check, you get your own coat back. Here, you don't. Ondo Stock Token is an IOU from a separate company in the British Virgin Islands. It's set up to stay walled off from the other parts of the business in case they go bust, and the real shares sit with US registered brokers. Independent Trust Company checks them on a daily basis and stands first in line to claim them for the token holders. You can cash out instantly, but you get digital dollars called stable coins, not shares. So you get the price and the reinvested dividends and the cash companies pay the shareholders after 30% US tax on those dividends. You don't get a shareholder vote. Ondo stocks and USDY aren't available in the US area. For US people, this is a legal category, not just a general address. It covers anyone living in the US, US companies, anyone buying on their behalf, and anyone placing an order from inside the US. So Americans living abroad need to read the terms before assuming that they qualify for this. And every buyer has to pass an identity check to actually buy from Ondo or cash out. That's starting to change. Ondo bought Oasis Pro, a brokerage registered with the SEC, the main US investment regulator. And in July, Oasis got authorization from FINRA, Wall Street's industry watchdog to offer tokenized stocks and funds to US investors. And that's permission, not necessarily a launch. In September, DTCC, a back office giant behind Wall Street, made Ondo the first tokenization company on the Fundserve. It's a system behind more than 85% of US mutual fund activity. And that's a lane on a highway of funds that's already in use. And in May, Ondo, JP Morgan's blockchain unit, Kinexis, MasterCard, and Ripple completed near-instant cross-border cashouts of tokenized government debt. But Ondo is not alone in this. In September, Securitize led tokenized stocks at $1.6 billion worth, with Ondo second at about a billion dollars on numbers from the crypto news site Coindesk. But within trading, Robinhood took 42%.

Binance's own B-Stocks took 35%.

And big exchanges are opening their own coat checks. And here's why all this still matters. All the tokenized stocks combined are worth about $4.9 billion.