Key Takeaways
- The tokenised asset market is expected to grow from $1.2 trillion* in 2023 to $13.7 trillion in 2030.
- The growth is likely to be driven by increased adoption of blockchain technology and the digitisation of assets.
- Traditional finance markets, such as global trade, stock market, and derivatives, are exploring tokenisation as a means to increase liquidity, efficiency and reduce costs.
- Citi predicts liquid tokenised non-crypto assets to be worth $6 trillion in 2030, while BCG predicts the value of tokenised illiquid assets to be $16 trillion in the same year.
- BCG also predicts the cryptocurrency market to be worth $8 trillion by 2030.
Introduction
We have collected market estimates from Citigroup, Boston Consulting Group, United Nations and many other publications to gain a better understanding of the estimated 2030 cryptocurrency market size.
With a current market value of $1.2 trillion*, the cryptocurrency market has already gained significant traction in relation to global financial markets, but what does the future hold for these markets? In this article, we'll explore the predictions for the growth of the tokenised asset market from 2023 to 2030, including individual predictions from experts and new markets that are being explored for tokenisation.
Tokenised assets for cryptocurrency and DeFi
One of the most significant drivers of tokenization is the growth of decentralised finance (DeFi) and its associated assets. The DeFi market is currently valued at $150 billion, with the overall cryptocurrency market cap being north of $1 trillion. In a report by Citi it predicts that the overall cryptocurrency market will be worth up to $8 trillion by 2030.
The DeFi market is yet to have a 2030 prediction however it has shown incredible growth in recent years, with more than $80 billion locked in various DeFi protocols at the time of writing. DeFi has enabled a new range of financial services, including lending, borrowing, insurance, and decentralised exchanges. All these services are powered by different tokens, such as stablecoins, governance tokens, and utility tokens, to name a few. By 2030 we can expect growth in the DeFi market and its value could surpass that of a centralised market cap.
Debt, Private and Public Equity
Apart from DeFi, the process of tokenisation can also revolutionise traditional markets such as debt, private equity, and public equity. The tokenised debt market is currently worth $500 billion, with predictions of growth to $1.9 trillion by 2030. Tokenisation can bring much-needed liquidity and transparency to the debt market, where assets are traditionally illiquid and challenging to trade. Private equity is another market that is poised for tokenisation. Although the tokenized private equity market is yet to be established, it is predicted that this market could grow to $700 billion by 2030. Similarly, the tokenized public equity markets are currently at $10 billion with a predicted growth up to $600 billion by 2030.
Tokenisation allows public and private equity to fractionalise large assets, such as real estate or art, into smaller, more tradable units. This means that investors can purchase smaller portions of the asset, allowing for greater liquidity in the market. Fractionalisation also enables faster and more efficient transactions, reducing the need for intermediaries such as brokers or custodians.
In addition to increased liquidity, tokenisation can also provide reduced costs for both public and private equity. Traditional transactions can be expensive due to the involvement of intermediaries and the need for extensive documentation.
Real estate and Trade finance
With the boom of NFTs, fractional ownership and DeFi lending mean that many entities are exploring new ways to leverage the benefits of tokenisation. Some of the other traditional finance sectors such as real estate and trade finance have been and continue to be explored as tokenisation evolves. The value of the tokenised real estate market could equate to $1.5 trillion by 2030. Tokenization can enable fractional ownership of real estate, making it easier for smaller investors to participate in the market. The tokenised trade finance market is predicted to value at $1 trillion in 2030. Similarly to the real estate market, tokenization can bring transparency and liquidity to trade finance, enabling more investors to participate in this market.
Individual Predictions from Citi and BCG
According to Citi, liquid tokenised non-crypto assets are estimated to be worth $6 trillion in 2030. On the other hand, BCG predicts the value of tokenised illiquid assets to be $16 trillion in the same year. Additionally, BCG also predicts the cryptocurrency market to be worth around $8 trillion in 2030.
New Markets for Tokenisation
The traditional finance (TradFi) markets are also exploring tokenisation as a means to increase efficiency and reduce costs. The global trade market, with a yearly volume of $32 trillion, could benefit from tokenisation by reducing paperwork and increasing transparency. The stock market, with a yearly volume of $60 trillion, could also benefit from the digitisation of assets. Furthermore, the derivatives market, with a yearly volume of $1,000 trillion, could benefit from increased efficiency and transparency through tokenisation. These new markets could provide significant growth opportunities for the tokenised asset market.
How is this related to Trading Strategy?
Trading Strategy’s vision is that we believe that tokenised assets will form a large share of all markets in the future, similarly to the information and estimates found within this article. These tokenised assets will trade on public blockchains, in DeFi, or on similar protocols that we have in the decentralised ecosystem today.
We aim to capture a portion of this market through algorithmic trading solutions built specifically for decentralised markets. We are building an algorithmic trading protocol that enables any trader to easily access vast opportunities in DeFi markets via automated trading, enabling them to manage their risk and rewards automatically.