MakerDAO initiates $500 million investment in US treasuries, how will this affect MKR token?

MakerDAO has initiated an investment, where $500 million of the funds that are collateralizing the Dai (DAI/USD) stablecoin will be relocated to US Treasuries and corporate bonds, with the main goal of providing the protocol with an additional yield at low risk. 

Maker (MKR/USD) is the governance token of the MakerDAO and the Maker Protocol, which is a decentralized organization and a software platform built on top of Ethereum (ETH/USD).

The $500 million investment as a catalyst for growth

MakerDAO is the governing body of the Maker Protocol and has taken the first step towards the plan to reallocate $500 million of its stablecoin Dai collateral reserves to short-term US Treasuries and corporate bonds.

The decentralized autonomous organization (DAO) voted on October 6 to approve a pilot transaction of $1 million, following an executive vote from Maker token holders, with the rest of the funds reallocated after the community’s confirmation.

Here, 80%, which is the majority of the $500 million, will be invested into short-term US Treasuries.

The $160 million will get allocated to the 0-1y US Treasury iShares ETF, and $240 million will be invested into the 1-3 year US Treasury iShares exchange-traded fund (ETF) from BlackRock.

However, the other $100 million will be allocated towards investment-grade corporate bonds that will be provided by investment management firm Baillie Gifford.

The holders of the MKR cryptocurrency once again determined the asset allocation.

This brings an additional level of appeal, demand, and utility for the MKR cryptocurrency.

Should you buy Maker (MKR)?

On October 7, 2022, Maker (MKR) had a value of $844.61.

MKR/USD Chart by Tradingview.

The all-time high of the Maker (MKR) cryptocurrency was on May 3, 2021, when the token reached a value of $6,292.31.This means that the cryptocurrency was trading 645% higher in value.

However, when we look at its performance throughout the past week, Maker (MKR) had its low point of value at $729.85, while the high point of value was at $865.60. 

Here we can see a $135.75 increase in value, or by 18%, which might signal a bullish run for the MKR cryptocurrency going forward.

Based on the 24-hour price movement, we can see that Maker (MKR) had its low point at $822.84, while its high point was at $855.48. This is an increase of $32.64 or by 4%.

The MKR cryptocurrency is on an upward trend and will likely carry on with its growth. Investors might want to buy MKR as it can climb to $900 by the end of October 2022.

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