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3 days ago
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Crypto for Advisors: Breaking Down Solana
In today's Crypto for Advisors, Josh Olszewicz from Canary Capital provides a breakdown of Solana - where it came from, and what's happening with the asset today. Then, Alec Beckman from Psalion answers questions about Solana's history and considerations for investors in Ask an Expert. – Unknown block type "divider", specify a component for it in the ` option Solana has emerged as a formidable player in the blockchain arena, showcasing remarkable resilience in the face of significant challenges. Despite setbacks such as the FTX collapse and network outages, Solana has rebounded impressively, with its native token, SOL, experiencing substantial growth since its lows in late 2022. The platform's appeal lies in its high-speed, low-cost transactions, positioning it as a preferred choice for both developers and users. However, concerns about centralization persist, stemming from the network's reliance on a limited number of validators and high hardware requirements. While Solana operates on a proof-of-stake consensus mechanism, offering scalability and staking yield, the legal classification of the SOL token remains a contentious issue in the United States, with the Securities and Exchange Commission yet to provide definitive guidance. Amid the global disruption of the COVID-19 pandemic, Solana Labs launched the Solana blockchain and its native token, SOL, in March 2020. Backed by leading venture capital firms including a16z, Jump, Multicoin Capital and Polychain Labs, as well as the now-defunct Alameda Research, the platform quickly differentiated itself through high-speed, low-cost transactions, offering a compelling alternative to legacy Layer 1 protocols such as Ethereum (ETH), Binance Smart Chain (BNB) and Tron (TRX). Competing platforms, such as Avalanche (AVAX), Polkadot (DOT), and NEAR Protocol (NEAR), followed later that year, intensifying the race for smart contract dominance. Solana operates on a proof-of-stake consensus mechanism, which allows users to secure the network and participate in governance by staking tokens. Unlike Bitcoin's proof-of-work, proof-of-stake networks such as Solana rely on validators — entities entrusted with maintaining the ledger and processing transactions. Solana's governance is partially influenced by stake-weighted voting, similar to a representative democracy, where the validators with the most staked assets wield the most influence. Solana's early momentum was fueled by endorsements from Sam Bankman-Fried and the now-defunct FTX exchange, which portrayed Solana as a faster and more scalable alternative to Ethereum. Bankman-Fried's entities invested heavily in the ecosystem and built significant infrastructure around it. However, the collapse of FTX and Alameda Research in late 2022 revealed material centralization risks. Both firms held significant positions in SOL, and their bankruptcy triggered a sharp sell-off, raising questions about token distribution and ecosystem resilience. In 2023, Solana faced further scrutiny when the SEC, under Chair Gary Gensler, identified SOL as a potential unregistered security in lawsuits against Binance and Coinbase. Robinhood subsequently delisted SOL, causing the asset to plummet to an extreme low, which was only surpassed by the FTX fallout. Nonetheless, SOL appreciated nearly 700% between October 2023 and March 2024, reflecting robust retail demand and increasing developer activity despite regulatory ambiguity. The regulatory tide began to shift in late 2024. Robinhood relisted SOL in November, citing evolving policy guidance and customer interest. In early 2025, the SEC, under its newly appointed Chair Paul Atkins, dismissed its case against Coinbase and paused proceedings against Binance. While Solana's classification remains unresolved, the industry anticipates a revised framework that could allow blockchain projects to be deemed "sufficiently decentralized," thereby sidestepping securities law constraints. The recent approval of crypto-based ETFs further signals growing regulatory acceptance and may provide a pathway to broader institutional involvement. Despite previous setbacks, Solana has emerged as a leading platform for retail activity, particularly in the fast-growing sectors of meme coins and NFTs. Phantom, a self-custody wallet built for Solana, reported 10 million monthly active users in 2024, more than 850 million transactions, and 24 million mobile app downloads. One notable catalyst was the January 2025 launch of the TRUMP coin, which coincided with SOL reaching an all-time high of nearly $300. Source: Bloomberg Terminal Although network reliability concerns persist, with seven temporary blockchain outages since 2020, Solana consistently ranks among the top blockchains in terms of daily active users, transaction volume, decentralized exchange activity and fee generation. However, in decentralized finance and real-world asset applications, Ethereum remains dominant, with Solana still trailing in key metrics, including total value locked and circulating stablecoins. Source: From an investment perspective, SOL has historically traded as a high-beta asset relative to bitcoin, resembling the behaviour of equities such as Strategy. Since late 2024, some firms have begun replicating the Strategy playbook, raising capital to acquire SOL for their balance sheets. While this may increase short-term demand, long-term efficacy will depend on sustained network adoption, regulatory clarity and institutional trust. - Unknown block type "divider", specify a component for it in the ` option Q. Why are investors interested in Solana? Solana stands out for its high speed, low fees, and growing ecosystem: Performance – Solana can handle up to 65,000 transactions per second with finality in seconds, making it ideal for real-time applications such as trading, gaming, and payments. Cost Efficiency – Fees are consistently under a cent, making it appealing for retail-driven use cases. Ecosystem Growth – Platforms like Jupiter (DeFi) and Helium Mobile (telecom) are expanding real-world use. Big-Name Backing – Partnerships with Visa and Shopify have reinforced Solana's position as a serious layer-1 contender. With a loyal community and strong momentum, Solana has emerged as a high-beta play on blockchain usability and scalability. Q. What should investors watch when evaluating Solana? Investors should keep an eye on both technical and ecosystem fundamentals: Network Stability – Following a history of outages, Solana is introducing Firedancer, a new validator client designed to enhance reliability and throughput. On-Chain Metrics – Daily active users exceed 1 million. DeFi TVL has recently surpassed $4 billion, driven by strong NFT volumes and app usage. Tokenomics – SOL has a declining inflation schedule and high staking participation (~70% of supply is staked). Regulatory Momentum – ETF applications from VanEck and 21Shares are pending, and any U.S. approval would be a significant milestone and create institutional inflows to Solana. Tracking development activity, usage, and upgrades is key to understanding Solana's staying power. Q. What are the biggest risks of investing in Solana? Solana carries high upside potential, but also meaningful risks: Past Instability – The network faced multiple outages between 2021 and 2023, which hurt investor confidence. Stability has improved, but remains under scrutiny. Regulatory Pressure – SOL was mentioned in SEC lawsuits against Coinbase and Binance in 2023 as a possible unregistered security. Centralization Concerns – A significant portion of tokens went to insiders, and the validator set is significantly less decentralized than Ethereum's. Market Volatility – Solana is closely tied to speculative trends, such as memecoins and NFT booms, leading to sharp price fluctuations. Institutional Builds – A significant increase in institutional building is occurring on the Ethereum blockchain. For all its innovation, SOL has risks driven by both fundamentals and narrative momentum. - Unknown block type "divider", specify a component for it in the ` option Stifel Financial Corp. greenlights advisors to invest in bitcoin for clients.. The U.S. SEC Commissioner Peirce confirmed that banks can include crypto services. Discover how nearly 100 crypto exchanges rank on the industry's most trusted risk assessment covering security, regulatory compliance and market quality: CoinDesk's Latest Exchange Benchmark Rankings. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
29-05-2025
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Crypto for Advisors: Crypto Universe
In today's Crypto for Advisors, Fabian Dori, Chief Investment Officer at Sygnum Bank, explores why crypto is more than just an asset class and looks at the institutional adoption of decentralized finance. Then, Abhishek Pingle, co-founder of Theo, answers questions about how risk-adverse investors can approach decentralized finance and what to look for in Ask an Expert. – Unknown block type "divider", specify a component for it in the ` option Moody's recently warned that public blockchains pose a risk to institutional investors. At the same time, U.S. bitcoin ETFs are drawing billions in inflows. We're seeing the start of a long-awaited shift in institutional adoption. But crypto's real potential lies far beyond passive bitcoin exposure. It's not just an asset class — it's an asset universe, spanning yield-generating strategies, directional plays, and hedge fund-style alpha. Most institutions are only scratching the surface of what's possible. Institutional investors may enhance their risk-return profile by moving beyond a monolithic view of crypto and recognizing three distinct segments: yield-generating strategies, directional investments, and alternative strategies. Like traditional fixed income, yield-generating strategies offer limited market risk with low volatility. Typical strategies range from tokenized money market funds that earn traditional yields to approaches engaging with the decentralized crypto finance ecosystem, which deliver attractive returns without traditional duration or credit risk. These crypto yield strategies may boast attractive Sharpe ratios, rivalling high-yield bonds' risk premia but with different mechanics. For example, returns can be earned from protocol participation, lending and borrowing activities, funding rate arbitrage strategies, and liquidity provisioning. Unlike bonds that face principal erosion in rising rate environments, many crypto yield strategies function largely independently of central bank policy and provide genuine portfolio diversification precisely when it's most needed. However, there is no such thing as a free lunch. Crypto yield strategies entail risks, mainly centered around the maturity and security of the protocols and platforms a strategy engages with. The path to institutional adoption typically follows three distinct approaches aligned with different investor profiles: Risk-averse institutions begin with yield-generating strategies that limit direct market exposure while capturing attractive returns. These entry points enable traditional investors to benefit from the unique yields available in the crypto ecosystem without incurring the volatility associated with directional exposure. Mainstream institutions often adopt a bitcoin-first approach before gradually diversifying into other assets. Starting with bitcoin provides a familiar narrative and established regulatory clarity before expanding into more complex strategies and assets. Sophisticated players like family offices and specialized asset managers explore the entire crypto ecosystem from the outset and build comprehensive strategies that leverage the full range of opportunities across the risk spectrum. Contrary to early industry predictions, tokenization is progressing from liquid assets like stablecoins and money market funds upward, driven by liquidity and familiarity, not promises of democratizing illiquid assets. More complex assets are following suit, revealing a pragmatic adoption curve. Moody's caution about protocol risk exceeding traditional counterparty risk deserves scrutiny. This narrative may deter institutions from crypto's yield layer, yet it highlights only one side of the coin. While blockchain-based assets introduce technical risks, these risks are often transparent and auditable, unlike the potentially opaque risk profiles of counterparties in traditional finance. Smart contracts, for example, offer new levels of transparency. Their code can be audited, stress-tested, and verified independently. This means risk assessment can be conducted with fewer assumptions and greater precision than financial institutions with off-balance-sheet exposures. Major decentralized finance platforms now undergo multiple independent audits and maintain significant insurance reserves. They have, at least partially, mitigated risks in the public blockchain environment that Moody's warned against. While tokenization doesn't eliminate the inherent counterparty risk associated with the underlying assets, blockchain technology provides a more efficient and resilient infrastructure for accessing them. Ultimately, institutional investors should apply traditional investment principles to these novel asset classes while acknowledging the vast array of opportunities within digital assets. The question isn't whether to allocate to crypto but rather which specific segments of the crypto asset universe align with particular portfolio objectives and risk tolerances. Institutional investors are well-positioned to develop tailored allocation strategies that leverage the unique characteristics of different segments of the crypto ecosystem. - Unknown block type "divider", specify a component for it in the ` option Q: What yield-generating strategies are institutions using on-chain today? A: The most promising strategies are delta-neutral, meaning they are neutral to price movements. This includes arbitrage between centralized and decentralized exchanges, capturing funding rates, and short-term lending across fragmented liquidity pools. These generate net yields of 7–15% without wider market exposure. Q: What structural features of DeFi enable more efficient capital deployment compared to traditional finance? A: We like to think of decentralized finance (DeFi) as 'on-chain markets'. On-chain markets unlock capital efficiency by removing intermediaries, enabling programmable strategies, and offering real-time access to on-chain data. Unlike traditional finance, where capital often sits idle due to batch processing, counterparty delays, or opaque systems, on-chain markets provide a world where liquidity can be routed dynamically across protocols based on quantifiable risk and return metrics. Features like composability and permissionless access enable assets to be deployed, rebalanced, or withdrawn in real-time, often with automated safeguards. This architecture supports strategies that are both agile and transparent, particularly important for institutions that optimize across fragmented liquidity pools or manage volatility exposure. Q: How should a risk-averse institution approach yield on-chain? A: Many institutions exploring DeFi take a cautious first step by evaluating stablecoin-based, non-directional strategies, as explained above, that aim to offer consistent yields with limited market exposure. These approaches are often framed around capital preservation and transparency, with infrastructure that supports on-chain risk monitoring, customizable guardrails, and secure custody. For firms seeking yield diversification without the duration risk of traditional fixed income, these strategies are gaining traction as a conservative entry point into on-chain markets. - Abhishek Pingle, co-founder, Theo Unknown block type "divider", specify a component for it in the ` option Bitcoin reached a new all-time high of $111,878 last week. Texas Strategic Bitcoin Reserve Bill passed the legislature and advances to the governor's desk for signature. U.S. Whitehouse Crypto Czar David Sacks said regulation is coming in the crypto space in August.
Yahoo
24-05-2025
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Crypto for Advisors: When Crypto Meets Netflix
Last week was Consensus Toronto 2025. If you couldn't attend, CoinDesk has you covered! Listen to amazing global thought leaders, sharing their insights on pertinent topics surrounding the digital asset space on day 1, day 2 and day 3. You can also read the extensive editorial coverage. In today's Crypto for Advisors, Shivani Phull from Pixelynx explains how Black Mirror is leveraging blockchain as part of evolving fan content and engagement. Then, Eric Tomaszewski from Verde Capital Management answers questions about the appeal of these products to next-gen investors in Ask an Expert. Thank you to our sponsor of this week's newsletter, Grayscale. For financial advisors near Boston, Grayscale is hosting an exclusive event, Crypto Connect, on Thursday, June 5. Learn more. – Unknown block type "divider", specify a component for it in the ` option How Black Mirror's on-chain experiment is paving the way for the future of entertainment monetization. Traditional storytelling is hitting its ceiling. The passive, one-way consumption model that has defined entertainment for decades is increasingly out of sync with the expectations of digital-native audiences. And now, with the rise of new technologies, the entertainment intellectual property (IP) is entertainment intellectual property, or IP, is being fundamentally reimagined. Black Mirror has never been afraid to challenge the status quo. In 2018, the series broke new ground with Bandersnatch, an interactive episode. It hinted at a deeper shift: from stories we watch to stories we shape. That shift is accelerating. Members of Gen Z and Gen Alpha have been raised in worlds like Minecraft, Roblox and Fortnite, where user-generated content forms the foundation of the experience. These audiences don't want to passively consume; they want to participate, shape and own the narrative. Traditionally, IP holders made money through licensing, syndication, product placement and box office sales. But generative AI is disrupting this model. With tools like OpenAI's Sora or Runway, anyone can spin up derivative content, posing both a threat and an opportunity. For IP owners, the challenge is clear: either lose control of the narrative or lean into new models that protect and expand it. Enter blockchain. Blockchain brings the missing layer of structure. It allows for: On-chain IP verification — using blockchain to prove who owns creative content, making it secure and transparent. Composable rights — content can be broken down into smaller parts that others can build on, remix or combine with new creations, allowing for microlicensing. Community ownership and participation rewards — fans can hold tokens that give them access to exclusive experiences and benefits as the project grows. Tokenized incentives for creators and fans — digital tokens are used to reward people for contributing, collaborating or being active in the community. This format unlocks new paths for storytelling, where fans are stakeholders shaping narratives with their favorite IPs, not just spectators. Banijay Rights, the global sales arm of content powerhouse Banijay Entertainment, which handles distribution for Black Mirror, has partnered with Pixelynx Inc. and KOR Protocol, a blockchain-based IP infrastructure and entertainment company based in Los Angeles, co-founded by iconic DJs Deadmau5 and Richie Hawtin. Led by visionary CEO Inder Phull, Pixelynx helped bring the Black Mirror universe on-chain in a way that's interactive, compliant and community-driven. Their latest initiative is a token inspired by the Nosedive episode, where fans link their socials and wallets to earn a reputation score. With more than 300,000 sign-ups, top participants unlock exclusive experiences and rewards, offering IP holders a new way to engage and reward their most passionate fans. The future of entertainment lies in embracing this shift through new frameworks that provide clear guardrails for IP usage, that preserve integrity, protect rights and enable value to accrue to fans and creators in a fair and transparent way. This marks the beginning of a new era for IP: one defined by protection, participation and sustainable monetization. By making IPs interactive, tokenized and on-chain, rights holders aren't just experimenting—they're sketching the blueprint for Storytelling 3.0. - Unknown block type "divider", specify a component for it in the ` option Q. What does "ownership" mean in the age of Web3, and how is it different from traditional investing? A. Ownership in Web3 is not just about holding an asset. More so, it's about participating in a system. With the Black Mirror token, owning the token means having a say in governance, gaining access to exclusive ecosystems, and building a digital form of identity that has the ability to grow in value over time. Unlike passive stock ownership, this is participatory. You are a stakeholder, not just a shareholder. Q. Can reputation-based tokens create economic value from behavior and is it sustainable? A. Yes, but it's nuanced. Black Mirror token gamifies trust because your on-chain actions and social interactions can earn tangible rewards. As a financial advisor, I'd caution that while this is exciting, it introduces performance-based risk. That being said, it reflects the direction of where young digitally native investors are heading. Q. Could these tokens act as a new form of "digital yield" for younger investors? A. Absolutely. Instead of fixed income yield, this is engagement yield. The more active and credible you are, the more awards you could potentially earn. It could be whitelisting access, platform discounts, or possibly token-based income. This is a new incentive model in some respects. When speaking to a client, I frame it as a form of behavioral finance in motion. With the right level of risk and time allocation, it becomes an asset that pays in influence and access. It's also a way to acknowledge that fulfillment and value look different to each person. Not every return is financial. - Eric Tomaszewski, financial advisor, Verde Capital Management Unknown block type "divider", specify a component for it in the ` option JP Morgan to enable clients to invest in bitcoin. Robinhood to acquire Canadian crypto firm Wonderfi. The U.S. Senate voted 66-32 to advance its landmark stablecoin legislation, the GENIUS Act. Digital Assets: Month in Review, with Joshua de Vos of CoinDesk delivering a monthly column on the crypto markets and ETF/ETP flows. 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Yahoo
16-05-2025
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Crypto for Advisors: Stablecoins Explained
Today's Crypto for Advisor newsletter is coming to you from Consensus Toronto. The energy is high as digital asset policy makers, leaders and influencers gather to talk about bitcoin, blockchain, regulation, AI and so much more! Attending Consensus? Visit the CoinDesk booth, #2513. If you are interested in contributing to this newsletter, Kim Klemballa will be at the booth today, May 15, from 3-5 pm EST. You can also reply to this email directly. In today's Crypto for Advisors, Harvey Li from Tokenization Insights explains stablecoins, where they came from and their growth. Then, Trevor Koverko from Sapien answers questions about the status of stablecoin regulations and adoption with regulations in Europe in Ask an Expert. Thank you to our sponsor of this week's newsletter, Grayscale. For financial advisors near Chicago, Grayscale is hosting an exclusive event, Crypto Connect, on Thursday, May 22. Learn more. – Unknown block type "divider", specify a component for it in the ` option When major financial institutions — from Citi and Standard Chartered to Brevan Howard, McKinsey and BCG — rally around a once-niche innovation, it's a good idea to take note, especially when the innovation is stablecoins, a tokenized representation of money on-chain. What email was to the internet, stablecoin is to blockchain — instant and cost-effective value transfer at a global scale running 24/7. Stablecoin is blockchain's first killer use case. First introduced by Tether in 2015 and hailed as the first stablecoin, USDT offered early crypto users a way to hold and transfer a stable, dollar-denominated value on-chain. Until then, their only alternative was bitcoin. Tether's dollar-backed stablecoin made its debut on Bitfinex before rapidly spreading to major exchanges like Binance and OKX. It quickly became the default trading pair across the digital asset ecosystem. As adoption grew, so did its utility. No longer just a trading tool, stablecoin emerged as the primary cash-equivalent for trading, cash management, and payments. Below is the trajectory of stablecoin's market size since inception, a reflection of its evolution from a crypto niche to a core pillar of digital finance. The reason stablecoins have been a hot topic in finance is their rapid adoption and growth. According to Visa, stablecoin on-chain transaction volume exceeded $5.5 trillion in 2024. By comparison, Visa's volume was $13.2 trillion while Mastercard transacted $9.7 trillion during the same period. Why such proliferation? Because stable dollar-denominated cash is the lifeblood for the entire digital assets ecosystem. Here are 3 major use cases for stablecoin. 1. Digital Assets Trading Given its origins, it's no surprise that trading was stablecoin's first major use case. What began as a niche tool for value preservation in 2015 is now the beating heart of digital asset trading. Today, stablecoins underpin over $30 trillion in annual trading volume across centralized exchanges, powering the vast majority of spot and derivatives activity. But stablecoin's impact doesn't end with centralized exchanges — It is also the liquidity backbone of decentralized finance (DeFi). Onchain traders need the same reliable cash equivalent for moving in and out of positions. A glance at leading decentralized platforms, such as Uniswap, PancakeSwap, and Hyperliquid, shows that top trading pairs are consistently denominated by stablecoins. Monthly decentralized exchange volumes routinely hit $100-200 billion, according to The Block, further cementing stablecoin's role as the foundational layer of the modern digital assets market. 2. Real World Assets Real-world assets (RWAs) are tokenized versions of traditional instruments such as bonds and equities. Once a fringe idea, RWAs are now among the fastest-growing asset classes in crypto. Leading this wave is the tokenized U.S. Treasury market, now boasting over $6 billion AUM. Launched in early 2023, these on-chain Treasuries opened the door for crypto-native capital to access the low-risk, short-duration US T-Bills yield. The adoption saw a staggering 6,000% growth according to from just $100 million in early 2023 to over $6 billion AUM today. Asset management heavyweights such as BlackRock, Franklin Templeton, and Fidelity (pending SEC approval) are all creating on-chain treasury products for digital capital markets. Unlike traditional Treasuries, these digital versions offer 24/7 instant mint/redemptions, and seamless composability with other DeFi yield opportunities. Investors can subscribe and redeem around the clock, with stablecoin liquidity delivered in real time. Circle's facility with BlackRock's BUIDL and PayPal's integration with Ondo's OUSG are just two prominent examples. 3. Payment A major emerging use case for stablecoins is cross-border payment, especially in corridors underserved by traditional financial infrastructure. In much of the world, international payments remain slow, expensive, and error-prone due to dependency on correspondent banking. By contrast, stablecoins offer merchants and consumers an alternative with its instant, low-cost, always-on transfers. According to research from a16z, stablecoin payments are 99.99% cheaper and 99.99% faster than traditional wire transfers and they settle 24/7. The shift is gaining momentum in the West, too. Stripe's $1 billion acquisition of Bridge and subsequent introduction of Stablecoin Financial Account signal the start of mainstream global adoption. Meanwhile, PayPal's rollout of yield on PYUSD balances highlights stablecoin's rise as a legitimate retail payment vertical. What was once a crypto-native solution is fast becoming a global financial utility. - Unknown block type "divider", specify a component for it in the ` option Q. In light of the recent news from Europe regarding stablecoins and Tether, can you explain how stablecoin investment is valuable to an individual? A. In the inherently volatile and highly risky world of cryptocurrencies, stablecoins provide individuals with a capital-efficient way to gain exposure to digital assets. Pegged to fiat currencies like the euro or commodities like gold, these digital assets provide stability and a hedge against crypto's volatility. Crypto individuals can park their funds safely in stablecoins during times of uncertainty without having to exit the market and deal with TradFi. This is why stablecoins dominate crypto. Their combined market cap has surpassed $245bln, a massive 15x growth over the last five years. Q. Given current market trends in Europe, are stablecoins more or less susceptible to market fluctuations? A. While stablecoins are inherently less volatile than typical crypto assets, they remain sensitive to regulatory developments and issuer credibility. When it comes to Europe, specifically, stablecoins have become less susceptible to market fluctuations due to stringent regulatory measures. This includes the implementation of the Markets in Crypto-Assets (MiCA) regulation, which provides a clear legal framework that requires stablecoin issuers to maintain adequate reserves and comply with strict governance standards. Such rules reduce the risk of de-pegging and enhance overall stability. However, this leads to market consolidation, a lack of competition, and reduced innovation at the same time. Q. Is Europe becoming a new stablecoin hub as it becomes more receptive to crypto? A. Europe has been signalling a friendly approach to crypto through MiCA, the first comprehensive crypto framework globally that introduces licensing requirements for digital asset service providers and AML protocols. The aim is to create a structured and harmonized regulatory environment for the crypto market, protect customers, and ensure financial stability. Through its evolving MiCA regulations, Europe could certainly enhance institutional confidence and attract more stablecoin issuers. However, that would require overcoming licensing (a lengthy and costly process) issues, effective implementation at national levels, and adapting to the fast-progressing crypto space. Europe is currently not a global leader in stablecoin adoption, but with clearer rules coming into place and its openness to compliant entities, it is well-positioned to emerge as a key hub for compliant stablecoin innovation. - Trevor Koverko, co-founder, Sapien Unknown block type "divider", specify a component for it in the ` option New Hampshire became the first U.S. State to pass a Strategic Bitcoin Reserve Bill into law. SEC Chair Paul Atkins says his priority is to "develop rational regulatory framework for crypto." Will Missouri become the first state to exempt capital gains on bitcoin profits among other investments? Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
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08-05-2025
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Crypto for Advisors: Trends in Tokenizing Real-World Assets
Thank you to our sponsor of this week's newsletter, Grayscale. For financial advisors near Chicago, Grayscale is hosting an exclusive event, Crypto Connect, on Thursday, May 22. Learn more. In today's Crypto for Advisors, Tedd Strazimiri from Evolve ETFs writes about the evolution of tokenization and the value it brings to investors. Then, Peter Gaffney from Inveniam answers questions about what tokenization can do for wealth managers and their clients in Ask an Expert. - Sarah Morton Unknown block type "divider", specify a component for it in the ` option Unknown block type "divider", specify a component for it in the ` option The tokenization of real-world assets (RWAs) has moved beyond buzzword status to become a multi-billion-dollar reality, led by Ethereum. Of the more than $250 billion in tokenized assets, Ethereum commands approximately 55% of the market. From stablecoins and U.S. Treasuries to real estate, private credit, commodities and equities, Ethereum has emerged as the preferred blockchain infrastructure for institutions aiming to bridge traditional finance with the digital asset world. Why tokenization matters At its core, tokenization is the process of converting ownership rights in RWAs into digital tokens that live on a blockchain. This transformation introduces unprecedented efficiencies in settlement speed, liquidity and accessibility. Tokenized assets can be traded 24/7, settled instantly and fractionalized to reach a broader range of investors. For institutions, tokenization reduces costs tied to custody, middlemen and manual processes, while offering transparency and programmability. But while tokenization is a trend that can take root across multiple blockchains, Ethereum's dominance is no accident. Its established infrastructure, widespread developer ecosystem and proven security have made it the go-to platform for major players entering the space. Ranked: Blockchain Networks Supporting RWA Tokenization BlackRock's BUIDL and the rise of institutional tokenization One of the best examples of institutional adoption of tokenization is BlackRock's BUIDL, a tokenized U.S. Treasury fund built on Ethereum. Launched in early 2024, BUIDL allows investors to access U.S. Treasuries via blockchain, offering real-time settlement and transparency into holdings. The fund has rapidly scaled to over $2.5 billion in assets under management, securing a 41% market share in the tokenized U.S. Treasury space. Ethereum remains the dominant chain for tokenized Treasuries, accounting for 74% of the $6.2 billion tokenized US treasuries market. BUIDL isn't just a product; it's a signal that TradFi sees Ethereum as the backbone of the next financial era. Stablecoins: the foundation layer No discussion of tokenization is complete without stablecoins. U.S. dollar-pegged assets like USDC and USDT represent the vast majority (95%) of all tokenized assets. Stablecoins alone account for more than $128 billion of Ethereum's tokenized economy1 and serve as the primary medium of exchange across DeFi, cross-border settlements and remittance platforms. In many developing economies, like Nigeria or Venezuela, stablecoins provide access to the U.S. dollar without needing a bank. Whether shielding savings from inflation or enabling seamless international trade, stablecoins show the real-world value of tokenized dollars, backstopped by the Ethereum network. Tokenized Stocks and beyond Tokenized stocks on Ethereum represent a growing but still nascent segment of the tokenized asset space. These digital assets mirror the price of real-world equities and ETFs, offering 24/7 trading, fractional ownership, global accessibility and instant settlement. Key benefits include increased liquidity, lower transaction costs and democratized access to markets traditionally limited by geography or account type. Popular tokenized stocks include Nvidia, Coinbase and MicroStrategy, as well as ETFs like SPY. As regulatory clarity improves, tokenized equities on Ethereum could reshape how investors access and trade stocks, especially in underserved or emerging markets. Additionally, real estate, private credit, commodities and even art are finding their way onto Ethereum in tokenized formats, proving the chain's adaptability for diverse asset classes. Tokenized RWAs (excluding Stablecoins) Source: as of April 22, 2025. Conclusion Ethereum's dominance in tokenized assets isn't just about being first — it's about being built for permanence. As the infrastructure underpinning real-world asset tokenization matures, Ethereum's role as the financial layer of the internet becomes more pronounced. While newer chains like Solana will carve out niches in the space, Ethereum continues to be the platform where regulation meets innovation, and where finance finds its next form. - , product research associate, Evolve ETFs Unknown block type "divider", specify a component for it in the ` option Q. What are the value drivers of tokenization for a wealth manager? A. The tokenization of assets should come with newfound utility. Financial advisors, wealth managers and other fiduciaries already have access to a wide universe of investment products. Where tokenization adds value is through the infrastructure emerging around tokenized real-world assets, particularly applications enabling the collateralization and margining of asset-backed tokens. Blockchain-based data management systems, like Inveniam, are designed to enable real-time, asset-level reporting to facilitate private asset-backed stablecoin loans, with the same integrity and traceability that exists elsewhere in the crypto space. This allows legacy private asset classes — like real estate and credit — to function similarly to how $30 billion in crypto loans are currently collateralized on platforms like Aave. This new utility is a significant value-add and a differentiating service factor that advisors can offer clients beyond traditional crypto allocations. Q. How does tokenization help advisors achieve their portfolio management goals? A. Alongside benefits like collateralization, advisors also gain greater control over client portfolio allocations through second-order tokenization benefits. Many investment funds across private equity, hedge funds, private credit and commercial real estate have high minimum investment requirements and illiquid secondary trading activity. This 'set it and forget it' mentality leads to inefficient portfolio management, in which advisors either overallocate or underallocate due to the 'lumpiness' of the underlying asset. By contrast, tokenized funds can be fractionalized far more efficiently than existing offerings, meaning advisors can buy in at much lower minimums, such as $10,000 increments, versus millions of dollars at a time. Then as client preferences, positions and portfolios shift, advisors can reallocate accordingly, making use of secondary liquidity venues and ongoing low-minimum subscriptions. This improves an advisor's ability to meet client demands and achieve return targets without being inhibited by outdated practices. - Peter Gaffney, director of DeFi & digital trading, Inveniam Unknown block type "divider", specify a component for it in the ` option SEC Commissioner Hester Peirce stated that 'tokenization is a technology that could significantly impact financial markets. New Hampshire makes history and becomes the first U.S. state to bring into law state investment in bitcoin and digital assets. Morgan Stanley is developing plans to offer direct crypto trading on its E*Trade platform by 2026. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
