A crypto analyst is skeptical of a bullish prediction that tokenized real-world assets (RWAs) could be worth $30 trillion by 2030, suggesting that 5% of that amount is a more realistic target.
“If the current 2-year CAGR [compound annual growth rate] of 121% continues, we could see around $1.3 trillion in tokenized traditional assets by 2030,” Real Vision chief crypto analyst Jamie Coutts said in an Aug. 27 X post.
Tokenized assets (non-stablecoins) graph. Source: Jamie Coutts
The tokenization of assets is the process of issuing security tokens (a type of blockchain token) representing real digital tradable assets. These tokens represent anything from real estate and bonds to art and stocks.
In June, Standard Chartered Bank and Synpulse forecasted that tokenized RWAs could reach $30.1 trillion by 2034.
While Coutts thinks Wall Street’s prediction is “overly optimistic,” even his more conservative estimate could significantly impact the Web3 ecosystem if it pans out the way he thinks.
He believes that if $1.3 trillion were in real-world assets (RWA) onchain, it would “create a massive flywheel effect” on other parts of the crypto ecosystem, such as non-fungible tokens (NFTs), social platforms, and gaming.
What does it mean for Ethereum?
But the “value accrual” on Ethereum — the preferred platform for early TradFi asset issuers — would be hard to calculate, he argued. This is due to the amount of market share layer-2 networks will capture compared to the value captured by the base Ethereum network itself.
“L2s might capture 95-99% of the revenue, with the remainder paid to ETH as settlement costs,” he noted, saying that L2s are “unlikely to give up their cash cow and allow ETH to scale the L1.”
“If ETH scales the L1, it would capture much more of the opportunity. This sums up what I call the Ethereum dilemma right now.”
Related: Why tokenized real-world assets are soaring
In June, consulting firm McKinsey & Company said tokenized financial assets have had a “cold start,” but they are on track to reach a market size of about $2 trillion by 2030.
The McKinsey & Company analysts added that tokenization needs a use case that offers a benefit over traditional finance systems.
“One such example is the tokenization of bonds. Barely a week goes by without the announcement of a new tokenized bond issuance.”
Meanwhile, in April, RippleX senior vice president Markus Infanger told Cointelegraph that research estimates the future value of tokenized markets to be $16 trillion, approximately eight times bigger than the total market capitalization of the entire cryptocurrency sector.
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