Bitwise Predicts JPMorgan and Wall Street Earthquake Towards $16 Trillion Assets Tokenization by 2030 

San Francisco-headquartered crypto asset manager Bitwise has in its market outlook predicted that JPMorgan would lead other Wall Street firms in a major reap in tokenizing real-world assets towards $16 trillion by 2030. The firm predicts that crypto space will witness a price boom in 2024 partly aided by the looming earthquake from huge inflow of Wall Street capital into the digital assets.  

Bitwise observes that prices of crypto led by Bitcoin and Ethereum-rival Solana has rallied to their highs only witnessed at the onset of 2022. The firm that is among hopefuls for spot Bitcoin exchange traded fund (ETF) approval forecasts Bitcoin price could soar and test higher levels after topping $45000 this month. 

Bitwise Confident JPMorgan to Help Expand Tokenized Assets in 2014

Bitwise Assets Management rules out the hype surrounding Bitcoin ETF would subside in a price dip. Instead, the world’s largest crypto index fund manager adds to the surprise forecast that Donald Trump could stimulate the Bitcoin price boom next year coincidentally with JPMorgan taking a step towards seizing tokenization opportunities. 

Bitwise is predicting that Wall Street titan JPMorgan would cement its position in expanding the tokenized real-world assets (RWA) to $16 trillion by 2030.  The fund manager led by chief executive Hunter Horsley indicates that unveiling a tokenized fund in the next year will enable JPMorgan to reap the efficiencies attributed to the on-chain assets.  

Horsley considers unveiling the tokenized fund will enable JPMorgan to join a segment bound to realize explosive growth. The executive indicated that JPMorgan has for several years explored blockchain technology before tapping the avalanche blockchain to assess the tokenized portfolios. 

JPMorgan Automates Platform Eyeing Tokenized Markets Opportunities

Bitwise Asset Management chief indicates that the tests enabled JPMorgan to automate substantial steps that constitute the portfolio management process. As such, Horsley considers that JPMorgan fully automated subscriptions, redemption and rebalancing steps.  

The Bitwise outlook echoes the illustrations by the Global Financial Markets Association that the blockchain-tokenized RWA would grow in value from $5.5B to $16T in seven years. 

Bitwise revealed that BlackRock was the pioneer Wall Street giant to leverage the blockchain-based collateral settlement offered by JPMorgan. The BlackRock chief Larr Fink hailed the system as capable of ushering subsequent generation for markets.  

Bitwise optimistic outlook for JPMorgan seizing the tokenized markets opportunities coincides with a period of developing Onyx blockchain platform. Besides, the development is behind the corporate-oriented stablecoin JPMcoin created in 2017. 

The projected input of JPMorgan in leading the tokenized RWA to trillion-dollar figures comes at a time when its chief Jamie Dimon indicated to the Senate financial services committee that he would ultimately shutdown cryptos.  

Dimon reiterated his opposition to crypto, a move considered by market observers as contradictory to the preparedness exhibited by JPMorgan to digital assets and tokenization. 

Tokenization to Liberate Global Wealth Locked in Illiquid Assets

The projection by Bitwise Asset Management mirrors the September jointly-published report by BCG chief Sumit Kumar and digital exchange ADDX’s Darius Liu. The duo lamented that a substantial chunk of the global wealth remained locked within the illiquid assets. 

The report noted that world economies are incurring the inefficiencies of illiquid assets including private debt, real estate, wholesale bonds, private art, IPO stocks and physical art among others.

Kumar attributed the asset illiquidity to interplay of several factors including inadequate wealth manager expertise, restricted access to assets controlled by elite cliques, absence of affordability for the mass investors, and regulatory hurdles. 

The report considers that on-chain asset tokenization could eradicate the challenge. The authors indicated that the tokenization marketplace is still underdeveloped considering it only tested above $2.3 billion in 2021. Nonetheless, they project the tokenization segment to accelerate to $5.6 billion by 2026. 

The report reflects on the growth realized by global digital assets whose daily trading volume surges from €30 billion in 2020 to €150 billion last year. The authors admitted that though an immense 5X growth, the value is minuscule relative to the inherent potential  of global illiquid tokenizable assets. 

Tokenization to Benefit Real Estate 

The authors illustrate that the on-chain asset tokenization opportunity will accomplish $16.1 trillion by 2030. The tokenization opportunity will comprise financial assets including pensions, alternative investments, and insurance policies. The report illustrates tokenizable assets including patents, car fleets and infrastructure projects. 

The report by BCG and ADDX observed that its forecast is highly-conservative with the best-case scenario estimating $68 trillion. Nonetheless, the tokenized assets will vary across countries owing to diversity in regulatory frameworks and size of asset class. 

BCG project executive Rajaram Suresh alongside the firm’s consultant Aaditya Kaul profiled on-chain asset tokenization as presenting the ideal opportunity to overcome the existing barriers to asset illiquidity. They illustrated that tokenization will overcome the present modality attributed to conventional fractionalization. 

The report by BCG and ADDX forecasts that real estate will reap the greatest benefit from tokenization. Such is likely as investors prioritize investments supported by RWA in decentralized finance (DeFi).

Editorial credit: pcruciatti / Shutterstock.com 

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