Tokenization Infrastructure Set to Fuel Next-Gen Financial Markets

Bitwise Chief Investment Officer Matt Hougan says investors looking to benefit from the tokenization boom should focus on the underlying infrastructure rather than just tokenized assets. In a recent interview, Hougan noted that while tokenized assets offer some advantages, such as trading around the clock and being easier to borrow against, they don't necessarily generate significant returns.

Hougan cited Ethereum and Solana as high-performance layer 1 networks that serve as the foundation for tokenization, while Chainlink plays a crucial role in connecting blockchains to real-world data. He estimated that Chainlink holds about 70% to 80% of the market for this purpose and put its valuation at roughly $6 billion to $7 billion, which he called 'relatively small' for something that could underpin global markets for the next 30 to 50 years.

The interviewer noted that spot Chainlink ETFs have not recorded a single week of net outflows despite weak market sentiment, which Hougan attributed to investors understanding the potential of Chainlink. Hougan also expects two significant shifts in the next decade: markets that never close and loans for everyone, facilitated by DeFi protocols.