A recent BCG-report highlight that despite the recent cryptocurrency crash, developer activity has continued to sustain. Logically you would expect the ‘Developer Activity’, and ‘Market Capitalization’ to be closely correlated.
Since that's not the case, what are the drivers behind the ‘Developer Activity’?
Money, money, money: Asset tokenization is expected to be a 16 trillion business in 2030
This explains something because the short fluctuations in value might not matter the most to the institutional money that one way or another is financing most of the developers’ salaries. Even though this is a ‘guestimate’ it is probably more reliable than your crystal ball. Similar projections have been made previously:
- World Economic Forum estimates that 10% of global GDP is recorded on the blockchain by 2027
- Finyear says the tokenization market CAGR will be 59% from 2019-2030
- Frankfurt School BC estimates the European tokenization market $1.5 trillion in 2024
Favor data above hype
As many people agreed with me in this Hackernoon viral story Don’t Believe the Hype, Trust History, we should look at history rather than hype to determine the future.
- The on-chain asset tokenization market globally surpassed USD 2.3 billion in 2021 and is expected to reach USD 5.6 billion by 2026 (19% CAGR).
- The daily trading volume in digital assets globally has grown fivefold from EUR 30 billion in 2020 to EUR 150 billion in 2022.
What makes real estate so suitable for asset-tokenization?
Real estate is considered the largest asset class in the world. But tokenization and fractionalization is no new concept to real estate provided by blockchain technology.
Real Estate Investment Trusts (REIT) have existed for several years: a REIT is a fund or company that owns, operates, and manages real estate assets (buildings for residential, commercial, or industrial use).
This is the concept of traditional asset fractionalization, however blockchain technology provides a new normal on several key parameters:
- Creating transparency and liquidity for real estate assets
- Enables fast, flexible, and secure transactions
- Customized storing, managing & distribution of the token
Don’t get sleep deprived by the volatile short-term
Do you emotional when you see the cryptocurrency price rise or fall by 10%?
Well. Stop it. It does not influence on your long-term business or career prosperity.
What makes up the long-term potential for your career or business is the product of:
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Technology
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Invested Capital
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Labor
You’ll need to figure out the answers yourself, and what to do about it. But the questions are already set:
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Is blockchain technology the future for asset tokenization?
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Is the technology a viable way for investing my capital or labor?
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Which companies provide the best opportunity?