A new ETF proposal could bring Ondo Finance one step closer to mainstream finance.

In a notable development that may enhance accessibility and credibility for cryptocurrency investors, asset management firm 21Shares has submitted an application to the U.S. Securities and Exchange Commission (SEC) for a new exchange-traded fund (ETF) that is based on ONDO, the native token of Ondo Finance. Should this application receive approval, the ETF would enable investors to gain exposure to ONDO via a conventional investment vehicle—eliminating the necessity to directly purchase, store, or manage cryptocurrency assets.

Source: ETF Stream

This could signify a pivotal moment not only for Ondo Finance but also for the wider institutional acceptance of tokenized assets.

What Is Ondo Finance?

Established in 2021, Ondo Finance is a blockchain-oriented platform that concentrates on the tokenization of tangible financial assets, including U.S. Treasury bonds and money market funds. Essentially, Ondo transforms traditional investment products into blockchain-based tokens that can be traded, settled, and held in a digital format.

The firm primarily caters to institutional clients—such as banks, asset managers, and other major financial entities—who seek to bridge the divide between conventional finance and decentralized technologies. Currently, Ondo Finance has a market capitalization of roughly €3 billion, with ONDO tokens trading at approximately $1.12 each.

Source: Cryptonite Academy

What Would an ONDO ETF Imply?

An ETF (Exchange-Traded Fund) is a regulated investment instrument that mirrors the price of an underlying asset. In this instance, 21Shares intends to establish a spot ETF that possesses actual ONDO tokens. This would enable both retail and institutional investors to invest in ONDO without the necessity for crypto wallets, exchanges, or blockchain expertise.

For institutional investors, this represents a significant shift. Traditional financial entities—such as pension funds, insurance firms, and hedge funds—frequently encounter regulatory and compliance challenges that hinder them from directly holding digital assets. However, an ETF integrates seamlessly into existing financial structures, rendering crypto exposure safer, more straightforward, and compliant with legal standards. This paves the way for substantial capital inflows from participants who have remained on the sidelines.

Source: B2Broker

Why It Is Significant for Crypto

Crypto ETFs—especially those supported by actual crypto assets (rather than merely futures contracts)—possess the capacity to unlock billions in institutional investments. They provide traditional investors with the reassurance of regulation, third-party custody, and familiar brokerage access—all while allowing them to gain exposure to the rapidly expanding digital asset sector.

If sanctioned, an ONDO ETF could:
• Significantly boost demand for the ONDO token
• Enhance market liquidity
• Validate tokenized real-world assets as a viable investment category
• Establish Ondo Finance as a prominent link between TradFi (traditional finance) and DeFi (decentralized finance)

Ondo’s Aspirations Extend Beyond an ETF

This ETF application is not occurring in isolation. Ondo Finance has been actively broadening its presence in both the cryptocurrency and conventional finance industries.

Key strategic initiatives encompass:
• Acquisition of Oasis Pro, a U.S.-licensed broker-dealer that specializes in digital securities, which will aid in the trading of tokenized financial products.
• Collaboration with Pantera Capital, a prominent venture firm focused on cryptocurrency, to establish a €214 million investment fund aimed at real-world asset tokenization.
• Links to World Liberty Financial, a decentralized finance platform associated with the Trump family, which recently invested €214,000 in ONDO tokens.
These advancements indicate that Ondo Finance is not merely capitalizing on a trend—it is constructing the infrastructure necessary for sustainable growth and profound integration into institutional finance.

Final Reflections: A Pivotal Moment for Tokenized Assets?

Although the SEC has yet to approve the ONDO ETF, the mere involvement of 21Shares—a well-regarded entity in the ETF domain—serves as a significant indicator. Institutional finance is beginning to recognize the worth of blockchain-based assets, and platforms like Ondo are ideally situated to take advantage of this shift.

If successful, this ETF could position Ondo Finance among the leaders of the institutional wave in cryptocurrency, representing another significant achievement in the merging of traditional and decentralized finance.