According to a report, Ethereum (ETH), which is a cryptocurrency that tokenizes real-world assets and has a market cap of $100 trillion by 2025, will be a resurgence. The letter shared with investors by Bitwise’s senior investment strategist, Juan Leon.
The document highlighted that the crypto market was marked by two narratives this year: Bitcoin’s (BTC) new all-time high, driven by spot exchange-traded funds (ETF) approval in the US, and Solana’s (SOL) meteoric popularity as retail investors piled into memecoin speculation.
As a result, Ethereum’s 66% year-to-date return paled when compared to BTC’s 130% gain and SOL’s 106% rally.
ETFs that signal changes
Recent signs indicate a change in sentiment. In the last 10 days, Ethereum-related ETFs attracted an astonishing $2 billion of net inflows. This is eight times more than the $250 million inflows that were recorded over the previous four months.
The 5th of December is a holiday. from Farside Investors pointed out that the spot Ethereum ETFs traded in the US registered $428.5 million in inflows, a new daily record propelled by $292.7 million directed at BlackRock’s ETHA.
Only 3 of the last 10 days that saw trading saw Ethereum ETFs see daily inflows below three-digit figures.
The surge in Ethereum investment indicates that both institutional investors and retail investors have re-embraced the cryptocurrency.
RWA growth
The tokenization of real-world assets might be the fuel for Ethereum’s resurgence. This process involves digitizing traditional assets — such as Treasury bills, real estate, and commodities — into blockchain-based tokens, offering faster, cheaper, and more efficient trading and settlement.
Tokenization has become a reality. Blockchain technology has been adopted by major players such as BlackRock, Franklin Templeton and UBS to tokenize RWAs. BlackRock’s tokenized treasury fund, BUIDL, currently has a market cap of $544 million.
The letter states that real assets have a global value of approximately $100 trillion, which creates a huge opportunity. Leon says that while it may take decades to see significant segments of this market shift over to blockchain, there is a huge upside.
Considering that Ethereum holds 81% of the RWA market, Leon estimates that fees generated from RWA-linked activity on Ethereum could ultimately surpass $100 billion annually, more than 40 times the network’s $2.4 billion in fees year-to-date.
The letter attributes Ethereum’s dominance to its status as the most reliable and decentralized smart contract platform, secured by its long history of supporting decentralized applications and its vast distributed validator network.
As the world’s largest asset managers explore tokenized assets, Ethereum remains the “battle-tested” standard. Ethereum’s growth could be explosive if regulatory forces accelerate the transformation.
It was stated in the letter that a U.S. Securities and Exchange Commission, which is increasingly embracing cryptography and promoting institutional participation and adoption of cryptocurrency may be able to provide clarity and remove obstacles for adoption and institution involvement.
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