Something is brewing in the real-world asset tokenization sector, and Bitwise CIO Matt Hougan believes the best way to gain exposure is through assets like XRP.
The industry leader shared his thoughts in his weekly CIO memo, where he talks about cryptocurrencies in five minutes. In this week’s edition, he highlighted the enormous potential of the tokenization industry and how buying XRP is a means of gaining exposure to the emerging technology.
Tokenization: The Next Big Thing
For the uninitiated, real-world asset (RWA) tokenization is a technological advancement that seeks to onboard traditional assets, such as stocks, bonds, and real estate, onto blockchain. Notably, this initiative is slowly gaining momentum, and BlackRock’s CEO, Larry Fink, is a big fan.
In the report, Hougan shared a quote from the BlackRock CEO, which claims that everything, from stocks to bonds to funds and assets, would be tokenized someday. Furthermore, he highlighted that this would be a massive opportunity for investors, presenting an untapped multi-trillion-dollar market.
For instance, stocks and bonds are a combined $257 trillion market, with the former representing $117 trillion and the latter $140 trillion. This alone trounces the opportunities in the hotly discussed stablecoin market, which US Treasury Secretary Scott Bessent projected would reach $2 trillion by 2030.
Major Progress in the Tokenization Front
Meanwhile, Hougan highlighted a few promising developments in the tokenization sector over the last month, one of which is the $200 million tokenization plan on the XRP Ledger. For context, Mercado Bitcoin, a prominent Latin American crypto exchange, announced on July 4 that it would tokenize $200 million in RWAs on the XRP Ledger, including fixed and equity income instruments.
Additionally, Robinhood and Kraken launched tokenized stock trading platforms, building on Ethereum’s Arbitrum and the Solana network, respectively. With these platforms open only to non-US users, Coinbase filed a request with the US Securities and Exchange Commission to allow Americans access to tokenized stocks.
Interestingly, the prospect that Coinbase’s petition will gain approval ticked up when US SEC Chair Paul Atkins branded tokenization “a significant innovation.” He made this remark in a recent media interview, emphasizing the Commission’s commitment to advancing tokenization in the American marketplace.
Holding XRP: A Form of Exposure to Tokenization
To invest in this rapidly growing sector, which Fink projects could rise 4,000x in the coming years, Hougan recommended investing in a “basket of Layer 1 blockchains and infrastructure plays.” Among them are Ethereum, XRP, Solana, and Chainlink.
Interestingly, the XRP Ledger is emerging as a major medium for RWA tokenization, with its involvement in several institutional attempts. For instance, the Dubai Land Department (DLD) selected the XRPL network as an infrastructure for its Real Estate Tokenization Project.
As a result, Hougan suggested that holding XRP could be a play to benefit from the expanding tokenization market. Notably, a recent analysis indicates that XRP could trade between $37 and $54 depending on its circulating supply if it captures 20% of the $18 trillion tokenization market projected for 2033.
Meanwhile, the Bitwise CIO also mentioned exposure to crypto stocks like Coinbase, Circle, and Robinhood as a supplementary means of investment in tokenization.
