TL;DR
- Jamie Coutts questions the $30 trillion projection for the tokenized asset market by 2030, proposing a more realistic figure of $1.3 trillion.
- Coutts warns about the “Ethereum dilemma,” where much of the value generated by tokenized assets might be captured by layer-2 solutions, affecting Ethereum’s share.
- Other estimates still foresee significant growth in the sector, projecting $2 trillion, $16 trillion, and between $4 and $5 trillion by 2030.
A recent analysis has cast doubt on the $30 trillion projection for the tokenized asset market by 2030. This figure was initially proposed by Standard Chartered Bank and Synpulse. Jamie Coutts, Chief Crypto Analyst at Real Vision, considers that a more realistic estimate would place this value at $1.3 trillion, based on the current compound annual growth rate (CAGR) of 121%.
Coutts argues that, although the $1.3 trillion figure is significantly lower than the original projection, it still represents a substantial increase in the tokenized asset market, which could have a major impact on the industry and the Web3 ecosystem.
Tokenization, Blockchain Fee Income & #Ethereum
Wall Street projects that $10 to $30 trillion in traditional assets will be tokenized over the next 5 to 10 years. That seems overly optimistic, considering BlackRock, the second-largest asset manager, has $10 trillion in AUM.… pic.twitter.com/vnhw0StW6V
— Jamie Coutts CMT (@Jamie1Coutts) August 26, 2024
Tokenization of assets involves converting physical assets such as real estate. Bonds, art, and stocks into digital tokens that can be traded on blockchain platforms. It is seen as a way to enhance liquidity, transparency, and accessibility in traditional financial markets.
The analysis also highlights the “Ethereum dilemma.” A concern about how the distribution of value from tokenized assets might affect the Ethereum network. Coutts notes that much of the revenue generated could be captured by layer-2 solutions. Leaving Ethereum with a much smaller share. This situation underscores the challenges Ethereum faces in scaling its network and competing with more efficient solutions.
The RWA Market Challenges Ethereum
Despite doubts about the $30 trillion projection, other estimates also show significant growth in the tokenized asset market. McKinsey & Company forecasts that the market for tokenized financial assets could reach $2 trillion by 2030.
Additionally, a report from the Global Financial Markets Association (GFMA). And Boston Consulting Group estimates that the global value of illiquid tokenized assets could reach $16 trillion within the same timeframe. Citigroup, on the other hand. Suggests that the market for tokenized digital securities could reach between $4 and $5 trillion by 2030.
In response to the enormous potential of the sector, major companies like Goldman Sachs are advancing in the tokenization industry. Plans are underway to launch three new tokenization products later this year. Both public and private blockchains are integrating a variety of assets.
