Tokenization and RWA: Transforming Traditional Asset Ownership in the Digital Era

The crypto market took a big hit in the last 3 months. Interestingly, many altcoins are down between 50% and 90% while BTC is ‘just’ some 20% below its 2024 highs, also ATH.

As the altcoin market is looking for a floor, BTC is exhibiting relative strength. That’s how it always goes, coming out of a bearish cycle, irrespective of the length of it (multi-month or multi-quarter): Bitcoin’s dominance rises until investors are ready and willing to pivot their profits into beaten down and ‘undervalued’ alts.

If anything, in this bi-furcated crypto market, the first signs of a new emerging trend are visible: tokenization plays are exhibiting relative strength.

Bitcoin Dominance Now More Dominant

Bitcoin dominance, a measure of Bitcoin’s market capitalization relative to the total cryptocurrency market, has recently registered a ‘breakout’ as it continued its upward trend. 

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Bitcoin dominance serves as a barometer for crypto market sentiment. When Bitcoin’s dominance rises, it often indicates that investors are seeking the relative stability and security offered by Bitcoin, even though it’s a very volatile asset. 

This trend tends to lead to reduced momentum for altcoins, as funds flow into Bitcoin rather than other cryptocurrencies.

For example, during periods of increased market uncertainty, Bitcoin often benefits from its status as a “safe haven” asset within the crypto space. As Bitcoin’s dominance increases, many altcoins may experience stagnation or declines in value. This environment tends to favor well-established cryptocurrencies with substantial market capitalizations and proven track records.

Blue-chip tokens working on a turnaround in relative strength

As Bitcoin continues to show its dominance, only a few blue-chip tokens start showing up as candidates to register a turnaround. Note: we are not talking a bullish trend, we are talking the end of a downtrend when priced in BTC and the start of a consolidation. 

These tokens often include major cryptocurrencies with strong use cases and widespread adoption. Despite the dominance of Bitcoin, blue-chip tokens like Ethereum (ETH) and Solana (SOL) are starting to show early signs of resilience when priced in BTC. Case in point: relative strength as evidenced by this Solana’ 2025 forecast research.

Interestingly, tokenization tokens—representing real-world assets (RWAs) such as commodities or financial instruments—are showing relative strength compared to other altcoins. This performance is a first sign of a growing interest in this particular segment of digital assets. It’s still speculative, admittedly, but the signs at the time of writing are convincing as explained in our 2025 crypto narrative.

The Growing Significance of Tokenization

Tokenization involves converting physical assets—such as gold, real estate, or other tangible items—into digital tokens that can be traded and managed on blockchain platforms. This innovation offers numerous benefits, making #tokenization an increasingly attractive option for investors.

Benefits of tokenized assets:

• Blockchain technology provides transparent transaction records, enhancing trust and reducing the potential for fraud.
• Once recorded, blockchain data cannot be altered, ensuring the integrity of ownership.
• Tokenized assets can be traded more efficiently compared to the underlying physical assets, providing greater flexibility for investors.

Tokenized gold might be one beneficiary of the tokenization narrative that is brewing. It combines the stability of precious metals with the benefits of digital assets. By tokenizing gold, investors can gain exposure to the value of gold while leveraging blockchain’s strengths. This could attract a new generation of investors who are interested in traditional assets but prefer the convenience of digital transactions, particularly in a time where the gold bull market seems unstoppable.

Tokenized real estate is another potential major use case. Tokenized real estate involves converting property ownership into digital tokens, allowing fractional ownership and easier trading of real estate assets. This approach offers benefits like increased liquidity, and lower barriers to entry for investors (certainly applicable to large real estate projects).

Macro Trends Supporting the Tokenization Trend 

There are 2 macro trends happening right now:

1. The emerging generation of investors, digital natives, show a clear preference in digital assets and digital trading.
2. Institutions are entering the crypto space. This trend got officially kicked off, at least as a macro trend, in our view, when Blackrock announced their intention to heavily engage in tokenization, in March of 2024.

As digital natives become more accustomed to engaging with digital assets and institutions enter the crypto space, tokenization could become a mainstream investment strategy.

While several blue-chip tokens like Chainlink and XRP are building on RWA. No surprise and no coincidence, the charts of these tokens are among the stronger ones, certainly when it comes to chart patterns, as explained in great detail in this XRP prediction 2025 research.

The Potential of Tokenized Assets

If tokenized assets continue to gain traction, it might become a macro trend within financial markets, certainly within the still relatively small crypto universe. 

The benefits of tokenization—including transparency, immutability, and liquidity—make it an attractive option for investors seeking a blend of traditional stability and modern technology.

As traditional assets are digitized, they offer new opportunities for investing and trading. The ability to tokenize physical assets opens up, think of real estate as no-brainer use cases, but also art and rate collectibles, presents countless possibilities.

It will be really interesting to see whether this trend will intersect with previous trends like decentralized applications (dApps) and decentralized finance (DeFi).

Take-aways

The crypto market is going to trigger new narratives in 2025. The only question is which one(s) exactly.

Tokenization, particularly of real-world assets, offer a unique opportunity in terms of utility. Will this be strong enough to trigger a macro trend in the crypto universe? With Bitcoin’s rising dominance combined with early signs of relative strength in tokenized assets, there is a fair chance that tokenization will be the next big thing in crypto.

In collaboration with Taki Tsaklanos.