Author: Juan Leon, Senior Investment Strategist at Bitwise; Compiled by 0xjs@Jinse Finance
In 2024, two key narratives dominated the cryptocurrency headlines: Bitcoin's rapid rise, driven by the launch of a Bitcoin ETF and record inflows; and Solana becoming the darling of retail investors, fueled by Meme coin speculation.
This has largely overshadowed Ethereum - the world's second-largest crypto asset. Of course, its 66% year-to-date return is still respectable in absolute terms, but it pales in comparison to Solana's 106% and Bitcoin's 130%.
But something interesting has been happening lately: over the past 10 days, investors have started to regain interest in Ethereum.
You can clearly see this in the net inflows into Ethereum spot ETFs, which have attracted as much as $2 billion during this period. In contrast, the net inflows for these same ETFs in the first four months were only $250 million.
So, what's going on?
As I reviewed Bitwise's recent 2025 crypto predictions, I realized what's happening. Among the various price forecasts, we outlined several "real-world" mega-trends that we believe will shape the industry in the coming year, from the continued rise of stablecoins to the surge of AI-powered trading bots using cryptocurrencies.
But one of the biggest and most overlooked opportunities is centered on tokenization: the process of bringing the massive real-world assets (RWA) market onto the blockchain.
"This is not just a tomorrow's story"
Tokenization is the process of digitizing traditional financial assets, such as government bonds or real estate, into tokens that can be traded on the blockchain. Tokenization holds the promise of making the buying and settling of financial assets faster, cheaper, and more digital. Many believe it could disrupt the fundamental workings of financial markets.
This is not just a tomorrow's story. Tokenized real-world assets are already growing rapidly, with firms like BlackRock and UBS bringing tokenized RWAs onto the network, covering government securities, commodities, real estate, private equity, and more. For example, BlackRock has a $578 million tokenized government bond fund and is seeking to do more. We believe tokenized fund assets will triple next year, with Ethereum as the driving force behind it.
Why Ethereum?
As the saying goes, you won't get fired for building on Ethereum.
Ethereum is the battle-tested, most secure, and most decentralized smart contract platform. Since its inception in 2015, it has become the leader in decentralized applications, smart contracts, and tokenization. It currently dominates 81% of the tokenized asset market, and its long track record and large distributed validator network give asset managers confidence in its security and reliability when moving assets on-chain.
The fact is, it's hard to overstate the size of the RWA market. The global value of real-world assets is estimated at around $100 trillion. Most of these assets will take time (perhaps decades) to migrate to the tokenized track. But if they do, the fees associated with RWA-related assets could exceed $100 billion per year. That's over 40 times Ethereum's $2.4 billion in total fees so far this year. With the incoming crypto-friendly SEC expected to provide the regulatory clarity needed to accelerate tokenization, investors betting on Ethereum now may be handsomely rewarded in the coming years.
This is just one of the many reasons we believe 2025 will be the year Ethereum reclaims its former glory.
