Appreciation Or Value?
Crypto is a great asset class for wealth creation. However, along with the volatility come times of depreciation. These are extremely difficult periods for any investor, especially newcomers. However, a balanced portfolio will always look to incorporate assets of value and stability. This is often in the form of precious metals, art, and real estate.
This is where tokenization is beginning to become a lot more attractive to many investors. Crypto maxis can now own the abovementioned “value” assets in the form of Crypto. Proof of physical ownership comes via the ownership of a digital token. In other words, you get to own physical assets in a digital form. Not only that, but you get to hold them yourself, as well as trade them on decentralized blockchains.
This is something that has interested me for years, and am quite bullish on this innovative concept, especially looking ahead to the following two bull markets. I believe that by 2030 there will be trillions, possibly even tens of trillions, in terms of tokenized real-world assets. So, is this going to become an addition to the average Crypto portfolio? I definitely think so.
Knowledge & Availability
It’s always the same during the initial stages of any new asset, or asset class. To a large extent, people are simply unaware. They are not on the lookout for new and exciting ways of doing things. Rather, they are immersed in their work, family, and social life. It’s a difficult nut to crack… but, eventually, it does crack. The “portability” and ease of ownership are however a great selling point. Hence, my optimism, in regard to the 2020s being a decade of enormous growth for tokenization.
We are currently in the stage of development and advancement. When an idea comes to life, so do the challenges and hurdles inherent to the idea. Performance and liquidity “rails” are busy being optimized, ultimately, making the concept that much more attractive. Along with that comes the increase and expansion of available and tradeable assets.
As more assets get put on the blockchain, the benefits become clear, ultimately, instilling trust and accelerating adoption. Now some of these real-world assets will gain some level of additional value being on a blockchain. However, for many, their value is dictated by their natural market and valuation. At this stage of the game, the most attractive aspects are ease of ownership and 24/7 liquidity… oh yes, and portability.
This is not a new idea. However, in terms of practical application, it is rather new. The pioneering stage is often exciting, but also comes packaged together with a lot of hard work and challenges. Personally, I am looking to slowly begin acquiring a diversified portfolio of tokenized assets, as well as the coins that I believe will be key in this monumental shift.
At the end of the day, it’s about having access to the entire spectrum of investable assets, while utilizing one sector, Crypto. Many of these investments also tend to act as a hedge for your standard Crypto portfolio, which is also a form of comfort. That’s it for this one, catch you next time!