BTC surged by almost 50% early this year, primarily propelled by the introduction of Bitcoin Exchange-Traded Funds (ETFs). These ETFs have significantly facilitated the accessibility of the leading cryptocurrency for retail and institutional investors.
The recent price action has sparked conversations among industry leaders about why institutional players are increasingly drawn to the crypto market.
Why Institutions Are Attracted to Bitcoin
In a recent interview, Chainlink founder Sergey Nazarov pointed out that the influx of new investors into Bitcoin comes from the global financial system, anticipating the next evolution in the crypto space: real-world asset tokenization. Nazarov emphasized that major financial institutions are gearing up for asset tokenization, aiming to compete with or tap into the capital flowing into ETFs.
“The next stage is asset tokenization where banks see all these inflows into ETFs and then they make assets to compete with the ETFs or to get some of that capital,” he said.
Tokenization is the conversion of asset rights into digital tokens on a blockchain. This process promises enhanced liquidity, transparency, and efficiency for digitalized physical assets. Citing industry experts, McKinsey forecasts a potential $5 trillion trade volume in tokenized digital securities by 2030.
Read more: What is The Impact of Real World Asset (RWA) Tokenization?
Likewise, BlackRock CEO Larry Fink believes tokenization represents a major technological breakthrough with the potential to transform asset management.
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