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April 15, 2024
3 min read

From Trial to Triumph: The Unstoppable March of Tokenisation

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In recent times, the gargantuan impact of the spot Bitcoin ETF approvals has induced a significant influx of capital into the cryptocurrency market. In a monumental first day, the volume topped at a ground-breaking US $4.6B between the eleven Bitcoin spot ETFs – with Grayscale championing half of this volume, as per 11th January 2024.

This move has not only propelled the bull market to new heights, but also underscored the rampant demand for tokenisation – particularly in real-world assets. As per Franklin Templeton’s CEO – one of the eleven asset managers with a now approved US Bitcoin spot ETF – stated that tokenisation is ‘securitisation on steroids’. Tokenisation allows us to extract greater value from assets with pre-existing information, by:

  1. creating fungibility,
  2. utilising its programmatic nature with smart contracts; and
  3. using the ledger as the source of truth.

By introducing 24/7/365 markets, the flow of assets & money will radically change, as transactions would not require traditional broker hours. This applies across all the liquidity spectrum for real-world assets – with illiquid assets such as real estate & fine art to liquid assets such as bonds & commodities.

Projected to grow into a $16T opportunity by 2030, asset tokenisation is being spearheaded by the top 50 banks in the world by market cap (sourced by LexisNexis). After some sleuthing, almost 90% of these financial institutions have tinkered with blockchain – mostly tokenisation – to curate and build the future of financial rails. A few notable examples from TradFi (traditional financial institutions) – Citibank tokenising private equity funds on Avalanche; BlackRock releasing a $100M tokenised investment fund with Securitize; Polygon-based tokenisation platform Libre going live for Brevan Howard, Hamilton Lane funds.

In our strides to shift the landscape with social impact, we launched the DigitalX Asset Reference Token Fund – also known as the DxART Fund. The Fund invests into a portfolio of fractionalised real-world assets across multiple asset classes. Its first offering is real estate – via a shared equity pool named the ‘HxART’, with exposure to fractionalised home ownership. It works by identifying residential properties being purchased by home owners who have the financial credentials to purchase the property and get financing from the bank but don’t have the necessary deposit. For the homeowners, they can live without the word that scares all of us Aussies… the down-payment. For investors, tokenisation can amplify the past 12-month growth rate to 9.5%, up from 8.9% with the conventional rails that exist today.

What are you waiting for? So DigitalX can release its own Bitcoin ETF… that’s in the works too 😉. Reach out and stay tuned.

 

  • real world asset tokenisation
  • digital asset

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