The opportunity of Tokenization

The possibilities of asset tokenization are endless. Any asset can be digitized and divided into smaller parts, from physical assets such as real estate, to financial instruments such as debt, equity, bonds, securities, among others.

According to the World Economic Forum, by 2022 60% of global GDP will be digitized, encompassing a total value of $10 trillion (we believe a conservative estimation). The asset tokenization market was valued at $1.25 billion in 2019, and is forecast to reach $5.70 billion in 2027, growing at a compound annual growth rate (“CAGR”) of 22.54% from 2020 to 2027.

Asset tokenization is one of the main emerging trends in the financial industry and is expected to achieve sustainable growth in the near future. While traditional commodity and asset trading businesses have faced a downturn, asset tokenization, coupled with blockchain technology, is completely revolutionizing the financial industry. At PassiveSphere, we believe that asset tokenization is an opportunity that is here to stay, and there is no better time to participate in this disruptive market.

One of the main factors driving the rise of the tokenization industry is the growing need to grant access to a growing audience of investors with new forms of investment. Both the technical progress in asset tokenization software, and the increasing demand in developing countries, are expected to result in higher growth opportunities for the industry in the coming years. For instance, an untapped area for development is to automate various asset management processes with the aim of improving liquidity and optimizing risk management through tokenization.

Currently, North America contributes the most value to the asset tokenization market (35% in 2018), followed by Europe (24%; where the regions of Germany, France, United Kingdom, Russia, and Italy stand out, respectively) and the Asian-Pacific (20%).