Ethereum (ETH) is poised to make a comeback in 2025, riding the wave of a new trend that capitalizes on the $100 trillion opportunity in the tokenization of real-world assets (RWA), according to a report. It is said that there is. letter Juan Leon, Senior Investment Strategist at Bitwise, shared this with investors.
The document highlighted that this year's cryptocurrency market was characterized by two stories. One is Bitcoin (BTC)'s new all-time high with approval as a spot exchange-traded fund (ETF) in the US, and Solana's (SOL) meteoric popularity as an individual investor. Meme coin speculation piled on.
As a result, Ethereum’s 66% year-to-date return pales in comparison to BTC’s 130% rise and SOL’s 106% rise.
ETFs that signal change
However, recent signs suggest a reversal in sentiment. Over the past 10 days, the Ethereum ETF has attracted an impressive $2 billion in net inflows. This is eight times the $250 million net inflow recorded over the past four months.
December 5th, data from Farside Investors noted that US-traded Spot Ethereum ETFs recorded inflows of $428.5 million, while BlackRock's $292.7 million for ETHA pushed new single-day records.
Additionally, the Ethereum ETF saw daily inflows below triple digits on only three of the past 10 business days.
This surge shows that institutional and retail investors are once again enthusiastic about Ethereum.
RWA growth
Tokenization of real-world assets may be the driving force behind Ethereum’s resurgence. This process involves digitizing traditional assets such as Treasury bills, real estate, and commodities into blockchain-based tokens to provide faster, cheaper, and more efficient transactions and payments. .
Tokenization is no longer a distant dream. Leading companies such as BlackRock, Franklin Templeton, and UBS are adopting blockchain technology to tokenize RWA. BlackRock’s tokenized treasury fund BUIDL currently has a market capitalization of $544 million.
Real-world assets are valued at approximately $100 trillion worldwide, creating incredible opportunities, the letter said. Although it could take decades for a significant portion of this market to migrate to blockchain rails, Leong sees tremendous upside potential.
Considering that Ethereum holds 81% of the RWA market, fees generated from RWA-related activity on Ethereum could end up exceeding $100 billion annually, which is the network's first year of the year. Leung estimates that it could be more than 40 times the $2.4 billion in fees.
The letter states that Ethereum's advantage lies in its position as the most reliable decentralized smart contract platform, ensured by its long history of supporting decentralized applications and its vast decentralized validator network. .
Ethereum remains the “tested and tested” standard as the world’s largest asset managers explore tokenized assets. Moreover, regulatory tailwinds could accelerate this transformation and lead to explosive growth for Ethereum.
The letter noted that increasing support for cryptocurrencies from the U.S. Securities and Exchange Commission (SEC) could provide much-needed transparency and remove barriers to adoption and institutional participation.
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