The Market Capitalization of Tokenized Real-World Assets Could Reach $10 Trillion by 2030
According to a report released by digital asset management company 21.co, the market capitalization of tokenized real-world assets (RWAs) could potentially reach $10 trillion by the end of the decade. Even in a bearish scenario, 21.co projects that the market cap of tokenized RWAs will still reach $3.5 trillion before 2030. Currently, the market cap of tokenized RWAs stands at around $116 billion, with USD-pegged stablecoins accounting for approximately 97% of this total. The Ethereum blockchain is responsible for issuing around 60% of all existing tokenized RWAs, making it the most widely used protocol in the DeFi, NFT, and web3 worlds.
USD-pegged stablecoins like Tether’s USDT and Circle’s USDC have been successful in implementing tokenization, allowing users to transfer assets that closely approximate the value of an actual US dollar in a permissionless and near-instant manner. 21.co also highlighted rapid growth in other areas of asset tokenization, such as the tokenized US government bond market which has seen a 450% growth rate.
RWAs – The Convergence of TradFi and Crypto
According to 21.co, there is a significant convergence between traditional asset classes and cryptocurrencies. As the crypto sector matures, more traditional institutions are expected to build their own products on blockchain technology. This transition will lead to increased integration between crypto and existing financial software, bringing real-world assets on-chain through tokenization. However, regulatory barriers and a lack of standardized processes may hinder the growth and adoption of tokenized RWAs.
Tokenized RWAs to Power Ether (ETH) to Multi-Trillion Dollar Market Cap?
If blockchains like Ethereum maintain their dominance in issuing tokenized RWAs, the demand for Ether (ETH) could significantly increase in the coming years. As the native token of the Ethereum blockchain, Ether is used to pay gas fees and power transactions. With a market cap of around $188 billion, Ether currently has three times more value than the $60 billion in tokenized assets directly issued on its blockchain. If by 2030, Ethereum hosts 60% of the projected $10 trillion tokenized RWAs, Ether could potentially become a multi-trillion dollar asset, rivaling even gold’s market cap.
However, recent performance of Ether has been poor, with a decrease of over 6% in the past month and over 25% from this year’s highs. Weak demand for newly launched Ether futures ETFs in the US and low on-chain activity are contributing factors. Additionally, falling yields on staked ETH and relatively high transaction fees continue to hinder adoption. Ether is currently trading around $1,570, with potential bearish sentiment if it breaks below key support levels.
Hot Take: Tokenized RWAs Set to Transform the Crypto Market
The potential growth of tokenized real-world assets represents a significant opportunity for the crypto market. With projections indicating a market capitalization of up to $10 trillion by 2030, the convergence of traditional finance and crypto is becoming more evident. The successful implementation of USD-pegged stablecoins and the rise of asset tokenization highlight the transformative power of blockchain technology. However, regulatory challenges and standardization issues may pose obstacles along the way. Nevertheless, if blockchains like Ethereum maintain their dominance in issuing tokenized RWAs, it could pave the way for Ether to become a multi-trillion dollar asset and solidify its position as a major player in the global financial landscape.
Wyatt Newson emerges as a luminary seamlessly interweaving the roles of crypto analyst, dedicated researcher, and editorial virtuoso. Within the dynamic canvas of digital currencies, Wyatt’s insights resonate like vibrant brushstrokes, capturing the attention of curious minds across diverse landscapes. His ability to untangle intricate threads of crypto intricacies harmonizes effortlessly with his editorial mastery, transmuting complexity into a compelling narrative of comprehension.