Tokenization of real-world assets (RWAs) is attracting institutional interest. Market participants are questioning whether RWAs are the next phase of financial innovation or a speculative bubble prone to collapse.
BeInCrypto had an exclusive conversation with market analyst Michael Van de Poppe, who underscored how the RWA market could reshape global finance in the years ahead.
Growth of Real World Asset Tokenization
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The RWA market has exploded from $29.6 billion to $72.85 billion over the past year, representing a 143% increase. This significant growth reflects escalating investor confidence in tokenized assets that connect traditional finance with blockchain ecosystems.
Van de Poppe commented to BeInCrypto that institutional investors are starting to recognize the promise of tokenized assets.
“It’s an indication of interest from Web 2 and traditional finance in the RWA market. Recently, we’ve observed a notable increase in stablecoin supply and interest from Web 2 institutions. Not long ago, PayPal launched a stablecoin on the SEI blockchain, and both Robinhood and Ondo introduced tokenized stocks, marking a significant awakening in the RWA sector,” Michael noted.
LSEG’s new Digital Markets Infrastructure (DMI) platform is digitizing private funds (a type of RWA: traditional investment funds) throughout their lifecycle—from issuance to settlement—on distributed ledger technology (DLT). This exemplifies tokenization, allowing private fund shares to be digitally represented, simplifying distribution and trading for investors.
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Moreover, this system is compatible with existing infrastructures and new blockchains, acting as a bridge between traditional finance and DeFi-style tokenized markets. The establishment of an RWA platform by a global operator like LSEG signifies that tokenization is transitioning from startups into mainstream finance. Tokenized treasuries and real estate, along with private equity/credit funds, are now being digitized, further expanding the RWA classification.
Though RWAs face illiquidity challenges, tokenization alongside DMI has the potential to enhance secondary trading. Additionally, LSEG’s reputation among banks, asset managers, and regulators may incentivize more institutional players to view tokenized RWAs as credible investments. This could significantly raise the total value locked (TVL) in RWA protocols, currently at $15.79 billion.
In the US, Nasdaq is seeking a rule change to permit the listing of tokenized stocks. Michael considers this a significant positive development for the RWA market.
“If a major player like Nasdaq is exploring initiatives in this space, it signals serious market recognition, indicating we may witness substantial growth in this sector,” Michael stated.
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Despite institutional advancements, the RWA landscape is still developing. Infrastructure is maturing, and there remains a lack of regulatory clarity. While major exchanges lend credibility, widespread adoption and scalability will require time.
“We are still in the early stages of tokenization. However, the rapid expansion of interest suggests a significant appetite for tokenization, as seen with Larry Fink’s endorsement and his billion-dollar investment in BUIDL. This sector is far from saturation; we’re observing a swift emergence of platforms that could take years to mature, yet it’s encouraging to witness this level of interest,” Michael shared with BeInCrypto.
Ondo Poised for Breakout
ONDO is eyeing possible gains as it looks to break above $1.13. Over five months from March to July, ONDO has formed a bullish Volatility Contraction Pattern (VCP) that is yet to confirm.
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A volatility contraction pattern (VCP) occurs when price swings narrow, indicating diminishing volatility and steady accumulation. Once sufficient pressure accumulates, a breakout past resistance usually triggers a sharp price increase. For ONDO, this resistance level is just below $1.20.
At present, the altcoin is trading between $1.06 and $0.90, with a noticeable drop in trading volume. This declining volume supports the pattern, and a sharp price increase coupled with rising trading volume would confirm a breakout. Such a move could push ONDO’s price towards $1.37 and beyond, potentially reaching $1.91 or higher.
This price movement would affirm investor confidence and heightened demand for RWA tokenization, similar to Ethereum’s position within DeFi.
“If a specific sector shows promise and projects exhibit strength, it will likely attract more interest from Web 2 institutions. These institutions are focused on returns, and if certain protocols demonstrate effective solutions to existing challenges, they will likely engage, mirroring the rising interest in Ethereum,” Michael stated.
However, a realistic perspective is necessary, as a broader market downturn could impact ONDO negatively. If bearish momentum persists, the token could fall below $0.90 and potentially decline to $0.84 or $0.78. Such a scenario would undermine the optimistic outlook and underscore the ongoing risks in the developing RWA sector.
