Crypto investment giant Pantera Capital says there is a “great on-chain migration” underway as tokenization moves from a concept to reality.
In a new newsletter, Pantera general partner Franklin Bi says “the rise of tokenized assets today mirrors the early days of ETFs (exchange-traded funds).”
Says the investor,
“When the first U.S. equity ETF (SPY) launched in 1993, it crossed $1 billion in AUM (assets under management) within a year. But the real inflection point wasn’t its size. It was when ETF volumes began consistently matching and eventually exceeding mutual fund flows. That’s when market structure changed and investor behavior soon followed.
We believe tokenization will hit a similar moment in broad market structure transformation and issuer and investor behavior.”
Bi says that when any one of four things happens, the tipping point for tokenization will have arrived. Those things include daily on-chain equity volume exceeding $1 billion, tokenized equity AUM crossing $100 billion, a top public company seeing more liquidity on-chain than its home exchange, and a global IPO listing bypassing New York entirely and issuing shares on-chain directly.
“When it happens, it will feel obvious in hindsight as tokenization’s ‘ETF moment.’ Today’s early adopters are focused on applying a better set of rails, but the biggest story is the structural shift in the future of capital markets. Once the migration is complete, blockchains will be recognized as the default destination for capital formation, price discovery, and value transfer. The first and last stop for issuers and investors.”
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