Analyst Casts Doubt on $30T Valuation for Tokenized RWAs by 2030, Suggests $1.3T

Some in the crypto community have cast doubt on a recent projection suggesting that tokenized real-world assets (RWAs) could reach a staggering $30 trillion by 2030.

Among the critics is Jamie Coutts, chief crypto analyst at Real Vision, who believes that a more realistic valuation is closer to $1.3 trillion.

In a recent post on X, Coutts pointed out that if the current compound annual growth rate (CAGR) of 121% for tokenized assets continues, the market could indeed reach $1.3 trillion by 2030.

$1.3 Trillion is Still Impressive

While this figure is significantly lower than the $30 trillion prediction, Coutts argues that it still represents a substantial increase that could have a profound impact on the broader Web3 ecosystem.

Tokenization of assets involves converting physical assets, such as real estate, bonds, art, and stocks, into digital tokens that can be traded on blockchain platforms.

The process is seen as a way to enhance liquidity, transparency, and accessibility in traditional financial markets.

Tokenization, Blockchain Fee Income & #Ethereum

Wall Street projects that $10 to $30 trillion in traditional assets will be tokenized over the next 5 to 10 years. That seems overly optimistic, considering BlackRock, the second-largest asset manager, has $10 trillion in AUM.… pic.twitter.com/vnhw0StW6V

— Jamie Coutts CMT (@Jamie1Coutts) August 26, 2024

The $30 trillion projection was initially put forward by Standard Chartered Bank and consulting firm Synpulse in June, which forecasted that RWAs could reach this valuation by 2034.

However, Coutts considers this estimate to be “overly optimistic” and cautions against expecting such exponential growth in the near term.

Even with a more conservative estimate of $1.3 trillion, Coutts suggests that the on-chain presence of real-world assets could trigger a “massive flywheel effect” across other areas of the crypto industry, including non-fungible tokens (NFTs), social platforms, and gaming.

However, the analyst also raised concerns about how the value generated from these tokenized assets would be distributed, particularly on the Ethereum network, which has been the preferred platform for many traditional financial institutions venturing into blockchain.

Coutts argued that much of the revenue might be captured by layer-2 networks, leaving Ethereum’s base layer with only a small fraction.

This scenario, which he refers to as the “Ethereum dilemma,” highlights the challenge Ethereum faces in scaling its network while competing with more efficient layer-2 solutions.

Tokenized Asset Market Could Reach $2T by 2030

Coutts’ cautious outlook is echoed by other industry experts.

McKinsey & Company recently reported that tokenized financial assets have had a “cold start” but are still expected to grow to a $2 trillion market by 2030.

Meanwhile, a report by the Global Financial Markets Association (GFMA) and Boston Consulting Group estimates the global value of tokenized illiquid assets will reach $16 trillion by 2030.

Even more conservative estimates from Citigroup suggest that $4 trillion to $5 trillion worth of tokenized digital securities could be minted by 2030.

Recognizing this potential, major companies are making significant moves in the tokenization space.

Goldman Sachs, for instance, plans to launch three new tokenization products later this year, driven by growing client interest.

It is worth noting that both public and private blockchains are witnessing the inclusion of various assets.