Tokenized Assets Poised for Huge Growth as Market Reaches Record High

• Tokenized real-world assets reached $26.5 billion market size with 70% growth since January, targeting the massive $400 trillion traditional finance market.

• Private credit and US Treasury securities dominate 90% of current tokenized asset valuations, showing strong institutional preference for secure assets.

The tokenized real-world asset market has gained unparalleled traction, with the market size of the tokenized real-world asset market reaching $26.5 billion, and seeking to tap into the huge $400 trillion market of traditional finance. The researchers at Animoca Brands point out the outstanding growth potential as institutional adoption is gaining pace across various blockchain networks and asset types.

Market Dynamics Signal Trillion-Dollar Future

Recent research by Web3 company Animoca Brands shows that tokenized real-world assets are a small part of the huge potential market in traditional finance. The sector has also shown impressive 70% growth since January, which shows long-term institutional confidence and strategic positioning for future expansion opportunities.

The research paper by Andrew Ho and Ming Ruan highlights the fact that the existing $26 billion in tokenized assets is dwarfed by the size of the traditional finance market of $400 trillion. The predominant tokens are private credit and US Treasury securities, making up about 90% of the total market valuation of tokens at present.

Asset managers are in the midst of strategic competition to build end-to-end integrated platforms that can manage end-to-end asset lifecycle management processes. The long-term value creation will benefit those organizations that will be able to develop end-to-end tokenization solutions and sustain competitive technological advantages.

Moreover, Ethereum continues to dominate the market with a 55% share, with that figure rising to 76% when layer-2 networks, such as Polygon, Arbitrum, and ZKsync Era, are included. The dominance of the platform is based on the security infrastructure, large liquidity pools, and a developer ecosystem that supports decentralized finance applications.

But researchers anticipate that multichain evolution will occur, with high-performance, purpose-built networks competing with Ethereum in the marketplace by offering specialized capabilities. The ability to interoperate with other blockchain networks will become a critical factor for platforms that want to achieve long-term competitive advantages in tokenization markets.

The expansion path would have a massive positive impact on associated cryptocurrencies, such as Ether, which has recently reached new records, and oracle Chainlink, which has also seen good gains compared to the market. Both assets have shown better performance compared to the rest of the cryptocurrency markets, indicating a rise in demand for tokenization infrastructure and supporting technologies.

The tokenized assets cover a wide range of assets such as private credit, treasury debt, commodities, stocks, alternative investment funds, and global bond markets. Such a wide range is a sign of significant potential in the traditional financial sector moving toward blockchain-based asset management services.

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