"Patience is a Super Power" - "The Money is in the waiting"
Showing posts with label ONDO. Show all posts
Showing posts with label ONDO. Show all posts

Tuesday, September 9, 2025

Tokenization of real word assets is real and increasing. Here's why Bitcoin's younger brothers and sisters might be the best bets

 


Ed Note: 
The recent $8.5 Billion investment by Jack Ma, co-founder of Alibaba Group and Yunfeng Capital, into the tokenization of energy assets, could be a major trigger for more institutional money to flow into the crypto space. Here I have laid out my thoughts on how retail investors might begin to position themselves.

Here is a Simplified Investment Report: Ethereum & Tokenization (2025)

1. Why Ethereum Matters

  • Ethereum is the #1 blockchain for tokenization, which means turning real-world assets like stocks, real estate, gold, or U.S. Treasuries into blockchain-based tokens.

  • Over half of all tokenized assets (≈57%) live on Ethereum or its Layer-2 rollups.

  • Big institutions (BlackRock, JPMorgan, Société Générale, HSBC) are already launching tokenized funds, bonds, and stablecoins on Ethereum.

  • Key upgrades (like EIP-4844 and “Layer 2” solutions) make Ethereum faster and cheaper, boosting adoption.

2. Key Complementary Players (Ed note: we are long ETH & GRT at present)

  • Chainlink (LINK): Provides the real-world data feeds (prices, interest rates, stock data) needed for tokenization.


  • Ondo Finance (ONDO): Specializes in tokenized Treasuries and funds.


  • The Graph (GRT): Helps apps search and index blockchain data.


  • Stablecoins (USDC, tokenized cash): The “dollars” of the system, critical for liquidity.

3. Price Outlook (2–4 Years)

  • Bull Case: If regulation is clear and institutions keep piling in, ETH could grow 3–5x by 2029.

  • Base Case: ETH grows steadily with tokenization adoption, outpacing Bitcoin in institutional use.

  • Bear Case: If regulators slow adoption, or competitors (Solana, private chains) gain share, ETH’s growth may lag.

4. Risks

  • Regulation: Some countries may prefer private blockchains over public Ethereum.

  • Competition: Solana, Avalanche, and consortium chains could take market share.

  • Fees & UX: If Ethereum’s scaling isn’t fast enough, it could frustrate users.

5. Investment Options for Retail Investors

Direct Crypto Exposure

  • Buy Ethereum (ETH) directly through a crypto exchange or regulated ETF.

ETFs – Best Picks (as of 2025)

For U.S. Investors:

  • iShares Ethereum Trust (ETHA) – BlackRock’s spot ETH ETF (low fees, safest bet).

  • Grayscale Ethereum Trust (ETHE) – Established but higher fees.

  • Bitwise Web3 ETF (BWEB) – Broader exposure to tokenization, DeFi, and blockchain infra (includes LINK, Coinbase, etc.).

For Canadian Investors:

  • Purpose Ether ETF (ETHH or ETHH.B) – First-mover, strong liquidity, CAD and USD versions.

  • CI Galaxy Ethereum ETF (ETHX or ETHX.B) – Low-fee ETH exposure, hedged/unhedged versions.

  • Evolve Ether ETF (ETHR) – Another strong spot ETH fund.

📌 Tip: Canadians can buy U.S. ETFs like ETHA if they want U.S. dollar exposure, but Canadian spot ETFs (ETHH, ETHX) are simpler for tax reporting.

6. Simple Portfolio Ideas

  • Conservative Tokenization Exposure:
    70% Ethereum ETF (ETHA or ETHH) + 30% diversified blockchain ETF (BWEB or similar).

  • Balanced Exposure:
    50% Ethereum ETF + 25% Chainlink/infra exposure (via BWEB) + 25% Bitcoin ETF (hedge).

  • Aggressive Play:
    70% Ethereum ETF + 20% Ondo/DeFi tokens + 10% high-risk smaller plays (The Graph, Stellar, etc.).

✅ Bottom Line:
For retail investors, Ethereum is the “core bet” on tokenization. Pairing ETH ETFs with diversified blockchain ETFs gives balanced exposure. Canadians have strong ETF choices with Purpose (ETHH) and CI Galaxy (ETHX), while U.S. investors should look at BlackRock’s ETHA as the anchor holding.

here’s a very simplified tokenization-focused model portfolio for retail investors, with three styles: Conservative, Balanced, and Aggressive.

Tokenization ETF.s (2025)

🟦 Conservative (low risk, steady growth)

  • 70% Ethereum ETF

    • U.S.: ETHA (BlackRock)

    • Canada: ETHH (Purpose) or 

    • ETHX.B (CI Galaxy) (Ed note: My preference-low MER)

  • 30% Blockchain ETF

    • U.S.: BWEB (Bitwise Web3 ETF)

    • Canada: HBLK (Harvest Blockchain ETF)

🟩 Balanced (moderate risk / reward)

  • 50% Ethereum ETF

  • 25% Blockchain ETF

  • 25% Bitcoin ETF (hedge & diversification)

    • U.S.: IBIT (BlackRock Bitcoin Trust)

    • Canada: BTCC (Purpose Bitcoin ETF)

🟥 Aggressive (higher risk / higher upside)

  • 70% Ethereum ETF

  • 20% Blockchain ETF (for exposure to Chainlink, Coinbase, Ondo, etc.)

  • 10% Small-cap tokens (Ondo, The Graph, Stellar — bought via exchanges, not ETFs)

✅ Key Takeaway:

  • Conservative = safer ETFs only

  • Balanced = mix ETH, BTC, and blockchain ETFs

  • Aggressive = heavy ETH + smaller high-risk tokens

    Here is a deeper dive:

    • Thesis: Ethereum is the default infrastructure layer for tokenized assets—money funds, Treasuries, stablecoins, and compliant security tokens—thanks to its developer density, standards, tooling, and institutional integrations. Multiple competing chains and private ledgers are growing, but most high-profile RWA initiatives still anchor to Ethereum or its L2s. PR NewswireCoinDeskRWA.xyz

    Technology & roadmap (why ETH is the “infrastructure play”)

    • Standards & tooling: ERC-20/721/4626/3643 underpin fungible tokens, NFTs, vaults, and compliant securities—widely adopted by issuers and custodians. Interoperability/market data via Chainlink CCIP & oracles is already piloted with DTCC for on-chain mutual fund data (Smart NAV). DTCC+1

    • Throughput & cost:

      • Dencun / EIP-4844 (Mar 2024) added “blob” data for rollups, slashing L2 costs and laying the path to full danksharding. KuCoinEIP-4844

      • Pectra (May 7, 2025) improved UX (wallet/account features) and staking flexibility; part of a steady cadence to scale L2s while preserving security. KrakenFidelity Digital Assets

    • Liquidity gravity: ETH hosts the deepest DeFi, stablecoin, and tokenized fund liquidity, a flywheel for issuance/secondary trading of RWAs. Recent data shows Ethereum’s stablecoin base at ~57% market share and at all-time highs, supporting settlement rails for tokenized assets. Cointelegraph

    Institutional adoption (who’s building on it)

    • Asset managers: BlackRock’s BUIDL, issued via Securitize, surpassed $1B AUM in year one and has expanded beyond Ethereum to several chains—yet Ethereum (and L2s) remain its core venues. PR NewswireCoinDesk

    • Market infrastructure: DTCC’s Smart NAV pilot with Chainlink demonstrated on-chain distribution of fund data—an enabling primitive for tokenized funds at scale. DTCC+1

    • Banks: Société Générale-Forge launched USD CoinVertible (USDCV) and EURCV on Ethereum & Solana with BNY Mellon as reserve custodian—pointing to regulated stablecoin rails for settlement/collateral. HSBC is active in tokenized gold. JPMorgan’s Onyx/TCN industrializes tokenized collateral (MMF shares, etc.). ReutersSG Forge+1CoinDeskHSBCJ.P. Morgan

    • Funds flow: Tokenized Treasuries/money-market funds surged ~80% YTD to $7.4B in 2025, with major programs from BlackRock, Franklin Templeton, Janus Henderson Anemoy—a big part of which runs on Ethereum/L2 rails. Financial Times

    • Scale elsewhere (context): Jack Ma’s Ant Digital is tokenizing ~$8.5B in Chinese energy assets on AntChain (private). It underscores global momentum—and highlights that some RWAs may live on permissioned ledgers even as liquidity seeks public chains. Cointelegraph

    Market position in tokenization

    • Share & totals: Public-chain RWAs on-chain sit around $27–28B (incl. stablecoins far larger), with Ethereum the leading venue for issuance, liquidity, and tooling—despite rising competition from Solana, Avalanche, private chains. RWA.xyz

    • Use cases that fit ETH best right now: tokenized MMFs/Treasuries, fund share registries, compliant security tokens, and institution-grade stablecoins for settlement and collateral. Wall Street JournalFranklin Templeton

    Complementary tokens for the tokenization push (diversifiers)

    • Chainlink (LINK): price oracles, Proof-of-Reserve, and CCIP cross-chain messaging used in the DTCC pilot and multiple tokenized funds. DTCC+1

    • Ondo (ONDO): tokenized Treasuries/money-market strategies (e.g., OUSG) have become a category leader integrated with DeFi on Ethereum/L2s. Ondo Finance+1

    • The Graph (GRT): indexing/query layer used by many RWA dashboards and apps. RWA.xyz

    • Regulated stablecoins: SG-Forge’s USDCV/EURCV (ETH/Solana) and institutional stablecoin initiatives from banks—key settlement media for RWA rails. ReutersSG Forge

    ETH price & 2–4 year outlook (scenarios, not advice)

    Starting point (today): see live price above. Macro: ETH underperformed in 2025 vs BTC/SOL as investors rotated to faster L1s; Pectra improved UX but didn’t instantly re-rate ETH. Still, structural tailwinds (tokenized funds, stablecoins, L2 growth) support a medium-term case. MarketWatch

    Key drivers (2025–2029):

    1. RWA growth: If tokenized MMFs/bonds scale from $7.4B → $50–200B, liquidity/fees accrue to ETH/L2s and DeFi collateral loops deepen. Financial Times

    2. L2 economics: Post-Dencun fee compression + L2 maturation (shared sequencing, data availability) expand throughput without sacrificing security. KuCoin

    3. Institutional rails: DTCC-style data, bank stablecoins, and custodial support reduce operational risk and improve capital efficiency on public chains. DTCC

    Scenario map (high level):

    • Base case: ETH tracks crypto beta with modest multiple expansion as RWA rails compound; gradual outperformance vs L1 peers on liquidity depth.

    • Bull case: RWA penetration accelerates; ETH/L2s become default venues for tokenized funds, with bank stablecoins native to ETH; staking + fee revenue re-rates ETH’s “cash-flow optionality.”

    • Bear case: Regulatory fragmentation pushes RWAs to private/permissioned chains; Solana/others capture most low-cost issuance; ETH remains strong but less levered to tokenization.

    (This is not investment advice; scenarios reflect uncertainties in rates, regulation, and tech execution.)

    Risks

    • Regulatory bifurcation: Banks/funds could prefer permissioned chains (e.g., AntChain, Onyx), constraining public-chain liquidity. CointelegraphJ.P. Morgan

    • Throughput competition: High-TPS L1s attract some RWA issuers; multi-chain BUIDL shows institutions will diversify venues. CoinDesk

    • Fee/UX headwinds: If L2 UX or data-availability costs don’t improve as fast as rivals’, app migration risk rises. MarketWatch

    Portfolio framing (if you want focused tokenization exposure)

    • Core: ETH (infrastructure beta to RWAs).

    • Picks & shovels: LINK (data/interop).

    • Applications: ONDO (tokenized Treasuries).

    • Settlement rails: regulated bank stablecoins (e.g., SG-Forge’s USDCV/EURCV where accessible to institutions). Ondo FinanceReuters

    What to watch next

    • Growth of tokenized MMFs/Treasuries (RWA dashboards). RWA.xyz

    • Bank and fund issuers launching ETH-native stablecoins/funds (Goldman/BNY program scale-up). Wall Street Journal

    • L2 roadmaps & post-Pectra improvements (rollup costs, DA layers). KuCoin

    • ED Note:

    • Besides owning ETH, BTC and GRT, I also own one of the mentioned ETFs in my personal, tax free investment account!


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