RWA Tokenization: Bubble Brewing or Finance’s Next Revolution?

Trillions in real-world assets stampede onto blockchain rails.

The Great Unlocking Begins

Traditional finance's fortress walls crumble as everything from Manhattan skyscrapers to rare whiskey barrels gets digitized. Asset managers who once scoffed at crypto now race to tokenize their portfolios—proving even Wall Street dinosaurs can learn new tricks when money's involved.

Why This Time Feels Different

Unlike previous crypto hype cycles, RWA tokenization delivers tangible utility: fractional ownership of previously illiquid assets, 24/7 global markets, and automated compliance baked into smart contracts. The infrastructure's matured too—regulators finally grasp the technology rather than outright rejecting it.

The Bubble Question

Sure, some projects will inevitably crash—remember when every startup slapped 'blockchain' on their pitch deck? But the underlying trend holds weight. When blue-chip institutions like BlackRock start tokenizing, it's beyond mere speculation. Though let's be real—finance will find a way to overcomplicate even this innovation with needless derivatives.

Tokenization doesn't just disrupt markets—it rewrites the rules of ownership itself. The real bubble might be traditional finance's illusion of control.

Real World Asset Tokenization Grows

The RWA market has surged from $29.6 billion to $72.85 billion over the past year, marking a 143% increase. This sharp rise highlights growing investor confidence in tokenized assets, which bridge traditional finance with blockchain ecosystems.

Van de Poppe told BeInCrypto that institutional players are beginning to recognize the potential of tokenized assets. 

“It’s a sign of interest from the Web 2 & TradFi into the so-called RWA market. The RWA market has already been growing substantially lately as we’ve seen a strong surge in the stablecoin supply and the interest in stablecoins from Web 2 institutions. Recently, we’ve seen a similar news item occur where PayPal built a stablecoin on top of the SEI blockchain. After that, Robinhood & ONDO have both released tokenized stocks, and that has taken a huge run, through which the RWA market is definitely one vertical that’s been waking up and is going to be a core pillar for this cycle,” Michael highlighted.

LSEG’s new Digital Markets Infrastructure (DMI) platform takes private funds (a FORM of RWA: they’re not crypto-native, but traditional investment funds) and puts their entire lifecycle — from issuance to settlement — onto distributed ledger technology (DLT). This is tokenization in action as private fund shares can be digitally represented, making them easier to distribute and trade among investors.

Furthermore, since it’s interoperable with both old systems and new blockchains, it’s a bridge between traditional finance (TradFi) and DeFi-style tokenized markets. When a global market operator like LSEG builds an RWA platform, tokenization moves beyond startups into the financial core. Like tokenized treasuries or real estate, private equity/credit funds are now digitized, which expands the RWA category.

RWAs suffer from being illiquid but tokenization along with DMI could change that by enabling secondary trading. Additionally, LSEG is trusted by banks, asset managers, and regulators. Its MOVE can encourage more institutional players to treat tokenized RWAs as legitimate. This could also substantially increase the TVL locked in RWA protocols at the moment, standing at $15.79 billion.

In the US, Nasdaq is also pursuing a rule change that WOULD allow the company to list tokenized stocks. Speaking to this Michael noted that this is a major positive sign for the RWA market.

“I think that, if a key player like the Nasdaq is jumping in on the initiatives and exploring opportunities, it’s a big signal for the markets that it’s taking it seriously, and therefore, we could see a strong expansion of this particular vertical,” Michael noted.

Despite this institutional entry, the RWA sector remains in its early stages. Infrastructure is still maturing, and regulatory clarity remains limited. While the entry of a major exchange provides legitimacy, the market will need time before achieving widespread adoption and scalability.

“To me, we’re still at a very early stage of tokenization. However, given the quick expansion of parties involved, it looks like there’s a huge amount of interest in tokenization (also fueled by Larry Fink mentioning that tokenization is the future & then investing more than a billion into BUIDL). In that sense, it’s definitely not NEAR saturation; we’re just seeing a quick emerging fact of platforms being designed, and that will likely take years; however, it’s good to see so much interest,” Michael told BeInCrypto.

Ondo Awaits Breakout

ONDO price is looking at potential gains as the altcoin is awaiting a breakout above $1.13. This is because over the course of 5 months between March and July, Ondo formed a bullish Volatility Contraction Pattern (VCP) which it is yet to validate.

A volatility contraction pattern (VCP) forms when price swings tighten, showing reduced volatility and steady accumulation. Once pressure builds, a breakout above resistance often triggers a sharp upward move. In the case of ONDO, this resistance zone sits right under $1.20.

Currently, the altcoin is consolidated between $1.06 and $0.90, noting a drop in the trading volume. The declining volume verifies the pattern, and when ONDO notes a sharp uptick in price along with a surge in the trading volume, a breakout would be confirmed. This would likely push the altcoin’s price towards $1.37 and past it to reach $1.91 and higher.

Such movement would confirm investor conviction as well as increasing demand for RWA tokenization, akin to ethereum when it comes to DeFi.

“If a certain vertical starts to show interest and projects are showing strength, then this should increase the interest from Web 2 institutions. Ultimately, these institutions are looking to generate a return and if there’s validation that certain protocols are working on a strong solution for an existing problem, it’s very likely that they’ll be jumping into it, comparable to the strong increase in interest for Ethereum,” Michael stated.

However, keeping a realistic approach in mind, a broader market downturn could weigh on ONDO. If bearish pressure builds, the token may slip below $0.90 and fall toward $0.84 or $0.78. Such a move would invalidate the bullish projections and highlight ongoing risks in the still-developing RWA sector.