Asset Tokenization Set to Become a $16 Trillion Opportunity by 2030 – Markets Media | Jewelry Dukan

A newly released report from global consulting firm BCG and ADDX, the digital private markets exchange, predicts that asset tokenization will become a $16.1 trillion business opportunity by 2030. This growth comes as the crypto winter prompts capital to focus on more viable blockchain use cases.

The projected growth in asset tokenization will be driven by demand from a wide range of investors for greater access to private markets. Asset tokenization and fractionation lowers investment barriers in private markets by greatly reducing minimum lot sizes.

Assets fractionated and tokenized on platforms like ADDX can reduce the minimum investment size from millions of dollars to just thousands of dollars. Previously, such systems were only available to institutions. Tokenized investing can also be virtually “borderless,” allowing investors around the world to invest in markets they previously had no access to.

Asset tokenization refers to the creation of tokens on a blockchain to represent an asset to enable more efficient transactions. Historically, many assets worldwide have been held in illiquid formats, with previous studies estimating the proportion of illiquid assets at more than 50% of total assets. Illiquid assets face challenges such as imperfect pricing and trade discounts compared to liquid assets, the report said. Tokenization creates liquidity by facilitating asset distribution and trading among investors.

The BCG and ADDX report lists five signs that asset tokenization may be on the verge of widespread global adoption:

  • increased trading volume in tokenized assets
  • Raising stakeholder sentiment in many countries
  • Recognized by monetary authorities and regulators
  • more asset classes are tokenized1
  • a growing pool of active developer talent in the blockchain space

Large institutions have already started tokenizing private funds on ADDX’s platform. partner group2 listed its Global Value SICAV Fund on the platform in September 2021, while Hamilton Lane’s3 Global Private Assets Fund was launched on the platform in March 2022.

Globally, tokenized assets are expected to grow in real estate, stocks, bonds and mutual funds, as well as less traditional assets such as car fleets and patents4. With a projected 50x increase between 2022 and 2030 from $310 billion to $16.1 trillion, tokenized assets are expected to account for 10% of global GDP by the end of the decade.

While the concept of asset fractionation has been around for some time, its impact has been felt primarily in the public markets, with structures such as fractional shares, ETFs5 and public REITs6. There has been a significant turning point in recent years with the emergence of asset tokenization players applying blockchain technology to private markets and alternative assets.

Titled “Relevance of On-Chain Asset Tokenization in ‘Crypto Winter'”7The published report was authored by Sumit Kumar, Rajaram Suresh, Bernhard Kronfellner and Aaditya Kaul of global management consultancy BCG and Darius Liu of private markets exchange ADDX.

ADDX_Fig_1_12Sep22

In anticipation of broader adoption of asset tokenization, the report makes several recommendations to current and potential stakeholders. For example, financial institutions might consider finding ways to pilot and deploy asset tokenization projects by updating existing business models rather than trying to replace them.

Developers could design standard architectures and protocols to ensure an easier and more seamless entry into the world of tokenization. Firms should also work to improve their clients’ financial literacy to help them understand tokenization as well as the underlying asset classes to which it provides access. Regulators could set up sandboxes to encourage innovation and set clear rules for tokenization while overseeing how tokenization might affect investor and consumer protection and market integrity, the report said.

Sumit Kumar, Managing Director and Partner, BCG South East Asia, said: “Crypto winter has tightened wallets for the entire blockchain sector. Some Web3 companies will be adversely affected. But projects that show inherent value, scalability, and the potential to enhance the traditional financial ecosystem could actually benefit against this new backdrop. Our analysis shows that asset tokenization projects could develop strongly. They are more likely to demonstrate viability in this capital-constrained environment and are therefore better positioned to attract the attention of investors who still have a sizeable stash of dry powder to deploy. This report predicts that even using a conservative methodology, asset tokenization would represent a $16.1 trillion business opportunity by 2030. At best, that estimate is $68 trillion.”

Oi Yee Choo, CEO, ADDX, said: “Asset prices can only rise to their true economic value if barriers to investor participation and ownership transfer can be lowered. For years, the technology to overcome these barriers was expensive and therefore only available on public exchanges. Blockchain is game-changing because it can be cheaply applied to private markets and alternative investments, where the number of investors is smaller, albeit wealthier, and the products are more bespoke. The result should make our hearts beat faster: assets can be liquid for both public and private markets. The potential economic benefits are significant. Recognizing assets for what they are really worth should lead to more investment and better capital allocation, which in turn will create economic growth and jobs. The real winner here is the real economy.”

Relevance of on-chain asset tokenization in the crypto winter


  1. These include assets like real estate, stocks, bonds, and mutual funds, as well as less traditional assets like fleets and patents
  2. Since 1996, Partners Group has invested more than $185 billion in private equity, private real estate, private debt and private infrastructure on behalf of clients worldwide. The company, listed on the SIX Swiss Exchange (symbol: PGHN), has assets under management of USD 131 billion as of June 30, 2022.
  3. Hamilton Lane has $832.5 billion in assets under management and regulation, which is comprised of $108.3 billion in discretionary assets and $724.2 billion in advisory assets as of June 30, 2022.
  4. The analysis excludes crypto assets.
  5. Exchange Traded Funds (ETFs)
  6. Real Estate Investment Trusts (REITs)
  7. The report can be downloaded here: https://www.bcg.com/publications/2022/relevance-of-on-chain-asset-tokenization

Source: BCG

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