Grayscale’s research head says tokenization will happen in waves and explains how to play it
Investors looking to bet on tokenization should think in phases, with institution-friendly networks like Canton likely winning first and Avalanche, Ethereum capturing more upside later, Grayscale’s Zach Pandl said.
What to know:
- Grayscale’s research head Zach Pandl said tokenization should be viewed as a long-term roadmap rather than a single trade, with different winners emerging at different stages.
- Pandl expects early gains to come from institution-centric, permissioned systems like the Canton Network, offering a “slightly upgraded” version of today’s finances.
- The next stage could be dominated by hybrid models such as Avalanche, and ultimately more ambitious, global and decentralized platforms like Ethereum.
Tokenization has become one of crypto’s favorite buzzwords, but Grayscale head of research Zach Pandl said investors should think about it less as a single trade and more as a long roadmap with different winners at different stages.
Speaking at EthCC conference in Cannes, France, Pandl said that the trend is still in its infancy. Tokenized assets — the process of using blockchain rails to settle, transfer and record ownership of all kinds of financial assets such as bonds, funds and equities — is rapidly growing. However, currently at $27 billion, it still represents roughly 0.01%, a tiny fraction, of global capital markets. That’s projected to swell to near $19 trillion by 2033, according to BCG and Ripple.
Big banks and asset managers already understand the opportunity. “The two things that institutions are aware of are stablecoins and tokenization,” Pandl said. But they are still trying to figure out where to allocate capital to actually benefit from these innovations.
From here, Pandl expects tokenization to unfold in phases, with different types of networks and models capturing value at each stage.
The first winners, he said, may be projects that look more like traditional finance, not less.
