Creating Transparency in a Trillion Dollar Market
The tokenization market is expected to become a trillion-dollar market in the next few years, according to numerous analysts. The Boston Consulting Group has estimated the growth of the tokenization market. In this estimate, growth is projected to be as high as $16 trillion by 2030, spread across various asset classes.
The market is still at the beginning of an S-curve development, but many major players are in the process of positioning themselves here. Studies by leading companies such as McKinsey, CITI, BNY and EY have clearly shown that this is not just hype. (Tokenization — Hype or Gamechanger? The view of McKinsey, CITI, BNY and EY)
But what does that mean for investors? How can investors profit from this market?
The answer is simple yet complicated — by investing in tokenized assets. To do this, however, it is necessary to know what tokenized assets exist and where you can buy them.
One of the essential prerequisites for investing in tokenized assets, besides understanding tokenization and its benefits, is to find these assets.
The goal of this article is to show investors a way to find tokenized assets from different providers.
Markets for tokenized assets
Due to the fact that tokenization is at the beginning of its development, there are no established market structures yet. This makes it difficult for investors to get an overview of which assets are available where.
In the established markets, for example for shares, there are large marketplaces in the form of exchanges through which shares are traded. As an investor, it is relatively easy to get access to the trading venues and buy shares. An investment in shares is therefore easy due to established structures. Not so for tokenized assets. There are still no large trading exchanges where thousands of tokenized assets are traded.
The market is just getting started. More and more providers are entering the market with their offerings. From small FinTech companies to the big players on the financial market, they are all starting to position themselves with their first offerings.
This is a challenge for the investor. Firstly, he has to find out which providers there are. This is difficult, because there are no real overviews. Even a search on Google brings only limited clarity — because the Google search “Tokenized Asset Providers” shows primarily platforms over which assets can be tokenized. But this is not relevant for the investor, because he wants to have platforms where he can invest in tokenized assets.
The investor must therefore first search for the providers of tokenized assets. This is time-consuming and tedious, as it is often not clear from the providers which assets can be bought where. Different providers offer different asset classes. Whether real estate, bonds, stocks, funds, collectibles, cryptocurrencies, etc., there are many asset classes available.
Some of the providers also offer primary and/or secondary markets. Primary markets are typically used for initial placements and issuance of assets. Secondary markets are trading venues for already placed assets, such as exchanges on which already placed assets are traded. For the investor, however, the whole thing becomes quite confusing, and he must first find out which options are offered by which provider. Further challenges arise from the fact that many providers of tokenized assets have certain access requirements. This can be, for example, an access only for “accredited”- and “institutional” investors. Or only “non-US citizens” can invest.
All in all, it can be said that the market for tokenized assets is still very complex and unstructured. Finding interesting assets is associated with a high search and research effort.
Finding Tokenized Assets with the Help of the Digital Asset Compass
It would be a great help for the investor to have transparency about the available options. With the help of an overview of the available providers and their assets, many things would be easier.
This is where the Digital Asset Compass comes in. The Digital Asset Compass is a website of a Liechtenstein company, which aims to provide a structured overview of all tokenized asset providers. With the help of filter functions, the offers of the providers can now be narrowed down and structured for the investor.
Thus, it is possible to filter for specific tokenized assets such as real estate.
The filter selects all providers that offer real estate in the form of tokenized assets. On the basis of the other criteria, such as services, regions, investor classes, the investor can then make a further selection and refine the results.
The selection then offers the possibility to click on the logo of the provider to get to a subpage, which provides much more information about the provider.
The Digital Asset Compass offers investors an easy way to select the market of providers and get an overview of available tokenized assets. The tedious search on the internet for different providers and their offers is simplified.
Tokenization Services
In addition to the possibility to filter the provider offers by assets, there is also the possibility to filter by tokenization services with the help of the Digital Asset Compass.
Thus, the “Services” filter can be used to filter the market of providers for those that offer tokenization services.
It is also possible to filter for providers that offer “custody” services and to get a quick overview.
Summary
The trillion dollar tokenized asset market is just emerging. This is creating great opportunities and possibilities for early stage investors and providers. For investors it is currently a big challenge to find out which providers and which investment opportunities are currently available. In painstaking research work, a number of offers can be filtered out.The Digital Asset Compass can save a lot of time. With the help of filter criteria, the offers of different providers can be selected easily, so that the investor gets a transparency.
Based on this, he can then decide through a further selection process which offers best meet his needs.
The more the market grows and matures, the more comparison portals will enter the market. Transparency is one of the most important factors for successful investments. Without knowing what options are available, it becomes more difficult for an investor to make successful investment decisions.
