Asset management firm Ark Invest recently expressed a bullish view on the future of real-world asset (RWA) tokenization and its potential impact on the broader digital assets industry.
What Happened: In the weekly newsletter shared Monday, the Cathie Wood-led firm Ark Invest spoke about Tether’s USDT/USD latest move into the RWA tokenization space.
Tether, the largest stablecoin issuer, launched Hadron, a platform that enables users to tokenize virtually anything, from commodities and corporate equity to government debt and corporate bonds.
Ark Invest believed that the launch of Hadron signaled a growing appetite for tokenization, which was still a very nascent industry. The total value of tokenized RWAs was only $11 billion, a minuscule percentage of the ~$500 trillion total addressable market.
“In our view, Tether is extremely well positioned to be a leader in this space, as RWAs represent a natural extension of its core business—tying digital assets to fiat currencies,” the firm noted.
RWAs are physical or off-chain assets, such as real estate, commodities, art, and financial instruments like bonds or equities, that can be represented digitally, or tokenized, on public blockchains.
Tokenization allows users to trade digital representations of assets, making them more liquid and, because of blockchain technology, more transparent.
Why It Matters: For the curious, RWAs are physical or off-chain assets, such as real estate, commodities, art, and financial instruments like bonds or equities, that can be represented digitally, or tokenized, on public blockchains.
Tokenization allows users to trade digital representations of assets, making them more liquid and, because of the immutable-nature of blockchain technology, more transparent.
The world's largest asset manager, BlackRock entered the sector with the introduction of its tokenized U.S. Treasury product, BUIDL, built atop Ethereum ETH/USD, earlier this year. As of this writing, it boasted of a market capitalization of $541.79 million, according to RWA market tracker Rwa.xyz.
According to Prophecy Market Insights, the real estate tokenization market was valued at $3.8 billion in 2024 and is expected to reach $26 billion by 2034 with a compound annual growth rate (CAGR) of 2.90%.
Read Next:
Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Comments
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.
