What’s Behind the Hedera Hashraph HBAR Rally: Black Rock MMF Token Hosted by Archax

Hedera (HBAR), the token behind Hedera Hashgraph, held a spectacular rally at the start of the new week. HBAR peaked at $0.18, its highest price for the past two years, doubling its price overnight.

Investors in HBAR saw rumors that the Hedera blockchain carried one of BlackRock’s tokenized assets. Reportedly, Hedera carried a token linked to one of BlackRock’s Money Market Funds (MMF).

After the initial hype, HBAR retreated again to $0.13, potentially extending the slide. HBAR has mostly moved horizontally in the past two years and has not reached its previous peak.

BlackRock Not Directly Involved in Token Generation on Archax Platform

After the 100% rally, it became clear that BlackRock is not using Hedera directly. However, a Hedera-linked project, Archax, explained it stands behind the new asset listing. Real-world asset listing is technologically possible for any blockchain, but in this case, HBAR spiked due to the belief that the BlackRock fund was directly involved.

Archax has already tokenized money market funds linked to the US dollar, as well as to GBP and EUR. Archax aims to popularize its trading platform, offering a relatively easy on-ramp for new investors.

On its side, BlackRock has experimented with digital assets and tokenization. But its tokenized assets would arrive through a partnership with Securitize. Through Securitize, BlackRock aims to enter the market for real-world asset (RWA) tokenization, bridging the gap between mainstream investors and decentralized finance.

After a period of meme coin creation, vaporware and NFT hype, the recent HBAR rally showed the market may be ready for real utility and added mainstream acceptance. Various attempts have been made to tokenize real-world assets, including niche assets and shares as well as physical items.

So far, stablecoins like Tether and USD Coin have been the best applications of real-world value tied up in tokens. Recently, gold-backed assets have also had a field day, even trading above the market price of physical gold at one point.

Is HBAR Safe to Trade?

The dust has not settled yet for HBAR, as the asset trades with anomalous daily volumes. In the past day, HBAR trades peaked at $3.14B, which is a record for the token.

In the past day, more than 62% of the token’s supply changed hands in a trading frenzy. HBAR may slip fast, as the 2% liquidity depth on Binance is still relatively low at $838K. The token’s liquidity scores are relatively low, below 700 on CoinMarketCap. This means that its price could be very unstable.

HBAR may return to a lower range before establishing a more sustainable trend based on chart analysis. The token is widely used, with more than 71% of the supply in active circulation. The goal of HBAR is utility, but the Hedera community has been hoping for a higher price range during the new bull cycle.

HBAR has been a speculative bet over the past few years. Hedera aimed to place itself as an alternative to Ethereum, bringing a graph-like structure instead of a blockchain. However, once the novelty wore out, HBAR also fell out of favor with investors.

The Coinglass funding rate for HBAR continues to be negative, as holders of short positions must pay to continue the shorting. At this point, HBAR may return to its pre-pump levels or continue trading anomalously in the case of a short squeeze.