A new report published by Decrypt media partner Forkast.News in association with trusted crypto exchange AAX sheds light on the scale and scope of the tokenized asset industry.

The research paper estimates that the size of the market, as of Q4 of 2020 has surpassed $20 billion, and is dominated by tokenized currencies, also known as stablecoins. According to data sourced from Bitstamp, the market cap of stablecoins grew 40% between March and August of this year. The explosive growth is thanks to its role as an off and on-ramp for investors moving cash from fiat into crypto, and also hedging against the volatility of the broader crypto market.

Arguably the biggest, and most contentious among them is Tether which this week hit a $20 billion market cap of its own.

But other industries have seen growth too. Tokenized energy markets have been steadily growing this year, led by companies such as PowerLedger, WePower and Cenfura who have been active in countries that have already deployed smart grid technology like Australia, Southeast Asia and parts of Europe.

“More money is flowing in, and that’s not just because of the Covid-19 pandemic,” AAX CEO Thor Chan told Forkast.News. “We are also seeing more innovation, such as the growth of the stablecoin market and an increase in the quantity of stablecoin that is being issued.”

A growing market

The report pulled together data from publicly listed projects found via Blockexplorers. It excluded cryptocurrencies, as they are native digital assets, as well as DeFi projects because of their extreme volatility.

The Tokenised Asset Market includes:

  • Tokenised Commodities
  • Tokenised Currencies
  • Tokenised Energy
  • Tokenised Fiat Money
  • Tokenised Gold
  • Tokenised Real Estate

It's worth noting the report makes the distinction between a tokenized asset, digital assets and Defi. Tokenized assets are blockchain tokens that represent a physical, tradeable asset/commodity.

A digital asset is an asset recorded on the blockchain or a digital ledger via a token that is secured by a cryptographic key. Whereas DeFi refers to Dapps that through smart contracts, build liquidity in the cryptocurrency market via credit and leverage.

If you'd like to read the report in full, you can find it here.

 

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