Tokenization Is Heating Up
The times, they are a-changin’…
While some outspoken lawmakers are demonizing cryptocurrency, saying it’s the tool of money launderers and terrorists… others in Washington are clearing the path for Bitcoin and its brethren to operate legitimately within our quote-unquote free market.
Yesterday, the D.C. Circuit Court of Appeals ruled against the SEC in its dispute with Grayscale Investments.
The SEC rejected Grayscale’s application for a spot Bitcoin ETF last year, despite previously approving similar futures-based products. Now the court has ruled that the agency’s decision was both “arbitrary” and “capricious.”
In the wake of the decision, cryptovangelists say the launch of the first spot Bitcoin ETF is imminent. (The SEC could reject Grayscale’s application again… but it would need to come up with a new and, importantly, better reason.)
It’s been incredible news for Bitcoin, which was already having a stellar year. As we write, the king of crypto is nearing $35,000 – a level it hasn’t touched since April 2022.
[CHART: BTC/USD year-to-date performance]
But as Bitcoin continues its steady trudge toward mainstream adoption…
As we predicted, the realm of security tokens is heating up.
Big names in finance are weighing in on how the tokenization of assets will soon change everything. “If you think about it,” says Franklin Templeton CEO Jenny Johnson, “it’s just securitization… on steroids.”
BlackRock CEO Larry Fink says, “The next generation for markets, the next generation for securities, will be tokenization of securities.”
And according to Simon Barnby, the chief marketing officer for London-based crypto exchange Archax, “We believe the future is the tokenization of all real-world assets, and all traditional financial instruments are moving on-chain too.”
His company, which is backed by Abrdn (the U.K.’s largest asset management firm), just announced plans to launch its own regulated tokenized assets exchange… by the end of this year.
That’s huge.
Archax’s exchange will join a growing number of platforms – a few of which we’ve outlined here for you – that are making tokenized assets available to individual investors.
Major institutional firms like Hamilton Lane and Apollo have already dived in.
But we’re still in the early innings… which is exactly where we like to be. Because it’s where the greatest opportunity lies.
And the opportunity is great.
Boston Consulting Group predicts the tokenization of global illiquid assets will be a $16 trillion business opportunity by 2030.
This chart from the firm’s recently released forecast illustrates the trend.
[CHART: Tokenized market as % of global GDP]
There’s no question about it. Tokenization is going to be massive.
And unlike cryptos, these cutting-edge instruments have already gone through the regulatory rigmarole… and come out the other side.
Yes, times are changing. And for security tokens – and the smart folks already investing in them – the future looks bright indeed.