Asset tokenization, a process that transforms real-world assets like real estate, art, or commodities into digital tokens on a blockchain, offers many advantages. It paves the way for new investment opportunities, enabling fractional ownership, boosting liquidity, and enhancing accessibility to traditionally illiquid or hard-to-trade assets.
Roland Burger, a consulting firm, estimates that the value of tokenized assets on the blockchain will reach at least $10.9 trillion by 2030, with real estate debt and investment funds being the top three tokenized assets.
In this post, we will explore five different cryptocurrencies that can help you diversify your portfolio in 2024. Three are midcap options, offering stability, while the other two are smaller cap options, potentially providing exponential growth. This balanced approach can help you manage risks and maximize returns.
The Future of Asset Tokenization
In recent weeks, Black Rock and Larry Fink have made significant strides in the asset tokenization race. Their announcement to establish a new fund on the Ethereum network underscores their ambition to shape the future of asset tokenization and blockchain technology.
So when it comes to asset tokenization of real estate bonds, treasuries, etc., Black Rock is putting its hat into the ring after the recent success and the success so far of its spot in Bitcoin ETF, and what they’re saying is it wants to be the leader in this space.
Regarding asset tokenization on the blockchain, Larry thinks it is on the record in recent interviews, talking about how the Bitcoin Spot ETF is much like a stepping stone towards a world where we start to tokenize everything on the blockchain.
Black Rock’s strategic moves in the real world position it as a frontrunner in asset tokenization. As we look ahead to the next decade, the question arises: can you seize the potential of the real-world asset tokenization space? What investment vehicles can you leverage to capitalize and secure a promising return for yourself? The possibilities are enticing.
Asset tokenization on the blockchain and five cryptocurrencies and tokens you can add to your portfolio to maximize your outcomes.
5 Top Real-World Assets to Explore For Your Portfolio
Asset tokenization has gained significant traction in recent years, particularly in real estate investment and traditional financial assets.
This process involves converting physical assets such as real estate, art, or commodities into digital tokens on a blockchain platform.
By bridging the gap between traditional and digital asset ownership, tokenization opens up new avenues for investment, asset transfer, and efficient asset transactions.
Moreover, it enhances liquidity for traditionally illiquid assets and democratizes access to asset ownership. As blockchain technology evolves, tokenization services are becoming increasingly sophisticated, offering a wide range of asset classes for investors to explore.
Projects like HBAR, Chainlink, Algorand, Centrifuge, and Ondo are at the forefront of real-world asset tokenization, designed to facilitate the tokenization of securities, real estate, and other financial assets.
HBAR RWA Tokenization
The Hedera hashgraph has been built out to allow businesses to represent ownership in assets like real estate or bonds, offering increased security and regulatory compliance within the decentralized financial ecosystem.
Hedera HBAR is being pretty clever here at the moment because even in the past few weeks, in tandem with the black rock announcement, they have changed the homepage of their website here to hone in on real-world asset tokenization.
In particular, they’re trying to run on and build on this narrative of real-world asset tokenization. Still, you’ll know that Hedera is pretty much mighty.
Technically, it’s not a blockchain, but they brand themselves as a high-throughput blockchain when they talk to institutions and other businesses that want to get on board with Hedera assets management.
But honing on this enablement of seamless tokenization of real-world and digital asset class at scale offers unmatched performance.
Secure and compliance for thriving tokenized economies, and if we dive a bit deeper, looking at their site and their dedicated information for real-world asset tokenization, we can see that they’ve been working on some different projects and have some good examples.
Such as tokenization on Hedera with tokenization investment instruments such as money market funds. Other examples of fungible tokens are based on diamond standards, physical coins, and bars.
Tokenization of stablecoins as well with Circle and Coinbase, other examples with tokenization for NFT marketplaces and launchpads, so lots of exciting stuff going on in terms of the real-world asset tokenization narrative. However, on Monday, April 1st, the crypto markets are currently the 36th largest cryptocurrency by market cap.
There is still a lot of potential for price growth, and you must look forward to how it is bridging the gap. This bull cycle is currently sitting at just under 11 cents, but it is one that you should keep an eye on when it comes to real-world assets.
Chainlink Asset Tokens
Tokenization is moving on to our second pick, Chainlink, which has been in this space for a while now. LINK Asset Tokens are digital assets on the Chainlink blockchain, representing ownership in traditional assets.
They offer governance, bridging the gap between financial institutions and decentralized finance. They enhance the financial system with minimal transaction fees by tokenizing real estate and other traditional assets, fostering democratization and accessibility.
The real-world asset tokenization problem they’re trying to solve is using the oracles on the Chainlink network to connect assets in the real world and data from the real world into one reliable data that can be passed not just via the Chainlink blockchain.
But also moved across different chains and maintained data integrity when that data was passed from one blockchain to another.
So that’s what they’re outlining here: the three requirements of tokenized real-world assets solved by Chainlink, where real-world assets are launched on the blockchain, and then cross-chain from blockchain A to blockchain B is moved.
Real-world assets stay updated on blockchain B, maintaining data integrity across chains and using Chainlinks to maintain that data integrity.
So again if you’ve been in this space for a while, you probably understand the Chainlink oracles and how they connect real-world data to on-chain events.
Real-world asset tokenization is the next step for Chainlink and the solutions they are coming up with to maintain data integrity for taking things like real estate or tokenized bonds and maintaining data integrity across chains using Chainlink CCIP.
So again, another good option here to think about is Chainlink in terms of overall market cap, which is currently sitting at about a $10.5 billion market cap. It is sitting at a price of about $18 per link token, and it is the 15th largest cryptocurrency by overall market cap.
There is still much room for growth and upward price movement with a Chainlink around the real-world asset narrative.
Algorand Real World Asset
The real-world asset narrative is probably the biggest strength that Algorand has right now. They’re doing a lot of work in tokenizing real-world assets on the blockchain.
This page on their side is dedicated to speaking about all of the different ways that they’re doing that, such as increased efficiency, transparency, accessibility, and increased liquidity.
They also have some excellent examples on the site, especially for real estate. If we open up this blog post, it goes in-depth about how Algorand has helped lofty, the real estate startup, transform the real estate industry, making it possible for anyone to own a fraction of a property.
Again, this comes back to what tokenization of real-world assets is all about when we look at something like lofty, where they make tokenization of assets possible on the blockchain. Still, it allows retail investors to invest for as little as a few hundred into an investment property to own a fraction of that investment property, and blockchain smart contracts allow payouts for the percentage or the weight of the investment that you hold in that particular investment property.
So you might own 2% of an investment property and be getting paid out 2% week over week, day over day, sometimes hour over hour, with smart contracts for your ownership in that investment property.
So what they’re trying to do is democratize the ability for retail and institutional investors to fractional real estate on the blockchain.
Again, real estate is only one example here of real-world asset tokenization but a very strong one, and Algorand is again laying the infrastructure and the foundations for that to happen over the next few years as we move towards the year 2030.
Think about that $11 trillion in assets tokenized on Chain by 2030. So, let’s look at Algorand, currently sitting at the 60 largest cryptocurrencies by market cap with just over $2 billion. The market cap is currently sitting at a price of about 24 cents.
Again, we did do another price prediction on Algo. You can check that out for where we think the price will go over the next 12 to 18 months, but again, it is another perfect pick for tokens for real-world assets.
Centrifuge: Physical Assets With Crypto
Centrifuge focuses on real-world asset tokenization, specifically in the DeFi (Decentralized Finance) space. So they’re trying to create a platform that allows you to use real-world assets as leverage or collateral.
For instance, Capital, taking loans or creating different investment vehicles on decentralized infrastructure using decentralized Finance.
So again, examples here and how it works to showcase this on their website, where you can finance your real-world assets by accessing affordable DeFi Capital without banks or other intermediaries.
Now, this is really what DeFi is all about. Still, Centrifuge is trying to take it to this next level by, you know, allowing you to use assets that you hold in the real world as collateral for taking out loans or accessing Capital in the decentralized finance space.
Conversely, you can traditionally use your existing crypto assets in the DeFi space as collateral. But we will be seeing over the next few years the merging of real-world assets like physical assets, real estate bonds, treasuries, etc., and being able to use those as leverage and collateral into decentralized finance space.
Centrifuge is trying to be a leader in that space, so again, institutions and DeFi protocols we’ve got lending here gaining access to more Diversified stable Junior and senior yield backed by productive assets from The Real World.
So things like it could be invoiced for your business using those as collateral to access Credit and Access Capital on Chain Revenue-based financing and much more.
So again, Centrifuge is a smaller cap coin when it comes to the overall maker cap here. In that case, Centrifuge is currently only the 171st largest cryptocurrency by market cap, sitting under $500 million at about 482 million. It has seen some good price action in the past couple of months upwards and is a player to keep an eye on when it comes to real-world asset tokenization.
Ondo Crypto Project Tokenization
Ondo is the fifth token that we will look at here when it comes to real-world asset tokenization. Ondo aims to be a market leader in tokenizing real-world assets and governing the decentralized finance (DeFi) protocols supporting tokenized real-world assets.
The Ondo Foundation and Ondo are doing similar work to Centrifuge, when it comes to creating a new era of financial inclusivity on Chain.
So the mission here is to usher in a new era of financial inclusivity and market efficiency through on-chain institutional-grade financial products and services, so there are a lot of different words and jargon.
They want to be a market leader in tokenizing real-world assets and lead the DeFi protocol supporting tokenized real-world assets governed by Ondo.
So again, if we look at a couple of examples here, what we’re seeing is institutional grade finance now on chain Ondo was building the next generation of financial infrastructure to improve market efficiency, transparency, and accessibility.
So again, using and tokenizing real-world assets like treasuries and bonds so that we can have a crypto-native way for you to use these assets as collateral as leverage so that you can access more liquid Capital on Chain with decentralized Finance have several different backers here, including Black Rock and Morgan Stanley. They are natively integrated with several other cryptocurrency protocols like Curve, Injective, and You’re In Finance, so there is lots of exciting stuff going on with Ondo.
So what they’re doing when it comes to tokenizing real-world assets is another one to keep an eye on when it comes to lending and borrowing on Chain by using real-world assets as collateral.
This space is only going to continue to grow again. If we look at Ondo’s coin market cap, we can see that it has been making some good moves over the past few months. It’s been on a perfect upward trajectory. It has breached the top 100 on coin market cap, currently sitting as the 88th biggest protocol in terms of the market cap, just over $1.194 billion overall market cap currently sitting at just over 85 cents, almost 86 cents per Ondo token. It is up over 400 % since launching at the beginning of this year so it’s been writing the wave of the real world asset tokenization narrative.
To Sum Up: Tokenization of Real-World Assets
In summary, these five top real world asset crypto represent our recommendations for investors looking to capitalize on the trend of real-world tokenization.
While this isn’t financial advice, you must have gained an understanding of projects to invest in and the market for real-world asset tokenization.
Significant players like BlackRock are positioning themselves as leaders in this space, echoing Larry Fink’s sentiments about the future of tokenization on the blockchain.
Understanding BlackRock’s impact on Bitcoin through initiatives like the Bitcoin Spot ETF underscores its potential influence in the broader cryptocurrency sphere. By exploring these projects and conducting thorough research, investors can stay ahead of tokenization offers and asset developments.