According to CoinDesk, the tokenization market is expected to grow significantly in the coming years, with private equity funds and credit leading the charge. The primary reason for the slow growth of the tokenization market so far has been technical bottlenecks, limitations around current infrastructure, and interoperability. However, the last year has seen significant progress towards overcoming these issues, paving the way for the next wave of tangible on-chain results driven by major financial players entering the market.
Private equity funds are showing intense interest in developing new tokenization vehicles for their investors, with traditional finance titans like Hamilton Lane and JP Morgan developing tokenized funds. This trend is set to continue into the new year, with the development of more structured instruments, including assets built from new revenue sources such as private credit. Tokenized real estate could also be a significant boon for the market, making investing more accessible and bringing new liquidity into traditionally complex and slow-moving markets.
The next generation of tokenized assets will include offerings like bonds and equities, as well as real-world assets such as art, automobiles, commodities, and fine wines. With new institutions and assets entering the market, new payment rails and industry-wide standards will be required to make these products and markets interoperable. This will not only demonstrate the power and utility of tokenization but also foster the trust needed to drive demand. In 2024, the flow of new tokenization is expected to turn from a slow trickle into a deluge, marking a significant revolution in financial affairs.