The following is a guest article from Thomas Labenbacher, Founder and CEO of Assetera.
As the crypto industry leaves 2024 on a high note — marking a year filled with explosive growth — 2025 shapes up to become quintessential for the industry’s evolution.
The surge in real-world asset (RWA) tokenization and institutional influx in crypto will accelerate, driven by five key sectors showing the most explosive growth potential. Each of these trends will have major implications for the future of finance.
Tokenization transforms market liquidity
The far-reaching impact of tokenizing traditional real-world assets (RWAs) will become pronounced in 2025, massively improving liquidity and broadening market access, and bringing about a shift in how we think about asset ownership and trading. Tokenization will enhance traditionally illiquid assets through fractional ownership and 24/7 trading on blockchain platforms, enabling smaller players to access previously institutional-only assets.
The tokenized asset market is projected to reach $5 trillion, up from around $310 billion in 2022, with real estate comprising $1.4 trillion and bonds $1 trillion. Fractional ownership could attract 20%–30% more retail investors, while over 80% of institutional investors are expected to adopt tokenization. The liquidity premium for illiquid assets could reach 5%–20%, with real estate seeing up to 60% improvement in liquidity compared to traditional investments.
The US, EU, and Asia will dominate tokenization adoption, accounting for over 85% of the market. In a clear sign of market maturation, the number of tokenized securities listed on blockchain-based platforms is expected to grow by 200%.
And as the market for tokenized assets expands, the regulatory framework surrounding these innovations is evolving to keep pace.
Major regulatory shifts reshape the landscape
The regulatory environment isn’t standing still – far from it. Global regulatory frameworks will create more clarity for digital securities in 2025, marking a crucial evolution in how these assets are governed and traded. This development comes at a critical time, as the industry has long sought clearer guidelines to operate within.
New unified regulations will promote cross-border trading and reduce legal ambiguities, while compliance tools integrating blockchain analytics will streamline regulatory adherence. These are substantial changes that will open new doors for market participants.
The impact is already becoming visible: markets compliant with frameworks like MiFID, MiCAR, and DLT in the EU could witness a 30%–40% growth in institutional participation. In fact, over 80% of jurisdictions worldwide are expected to implement clear digital asset regulations, up from 50% in 2023.
To support this regulatory evolution, the number of regulated tokens is projected to grow 50% annually, with compliance software reaching $6 billion by 2025.
With clearer regulations providing a stable foundation, traditional financial institutions are increasingly recognizing the potential of tokenized assets.
Rise of institutional participation drives maturity
Next year, the industry will likely see a potential rise in institutional investments driven by improved infrastructure, custody solutions, and risk management tools. As more big players enter the market, it fundamentally strengthens the ecosystem. Among the main incentives for institutions to increasingly participate in secondary markets are better custody solutions and reduced settlement times made possible by blockchain-based infrastructure.
To address the sophisticated needs of institutional investors, risk management tools, including smart contract audits and automated compliance systems, will address operational and regulatory risks, while specialized custodians bridge traditional finance and blockchain-based trading.
Institutional trading in digital assets including stablecoins is expected to grow from 35% of the total market volume in 2023 to 50% in 2025, contributing $5–$6 trillion annually. Institutions will likely contribute more than 70% of liquidity in secondary markets for tokenized securities, bolstered by enhanced blockchain infrastructure and reduced settlement times. At the same time, real-time settlement enabled by blockchain could save institutions $10 billion annually by eliminating traditional clearing processes.
In the custody space, leading providers like Fireblocks, Anchorage, and BitGo are projected to secure $5 trillion in digital assets by 2025, up from $1.5 trillion in 2023.
As institutional adoption grows, the need for better integration paths between different blockchain networks becomes increasingly important.
The evolution of interoperability enables cross-market trading
Perhaps one of the most exciting developments on the horizon is how advances in blockchain interoperability will enable seamless trading across platforms and jurisdictions in 2025, allowing assets issued on one blockchain to be traded seamlessly across multiple platforms and jurisdictions via interoperability protocols that enable cross-chain transfers to foster a unified ecosystem for secondary markets.
This will reduce fragmentation, allowing traders and investors to access global liquidity pools without switching between isolated networks, and increase the growth rate of cross-border trading by eliminating barriers like currency exchange limitations and local custodianship. Still, regulatory harmonization will remain a key challenge, requiring close collaboration between technology providers and policymakers.
The potential impact is substantial: interoperable networks could handle over 50% of tokenized transactions, with cross-chain potentially doubling trading volumes versus single-chain competitors.
Looking at the broader ecosystem, up to 70% of secondary market platforms could adopt cross-chain solutions through more than 150 operational bridges, gradually moving away from those that in the past suffered from security vulnerabilities, enabling seamless interoperability between blockchain ecosystems. Wrapped assets are also expected to represent $1 trillion in tokenized value across chains by the end of 2025, with cross-chain platforms reducing transaction finality times by 40%–60% and improving capital efficiency and trading speeds.
While traditional institutions are embracing tokenization, parallel innovations in decentralized finance are reshaping how these assets can be traded and managed.
Faster adoption of decentralized platforms accelerates transformation
The final trend we’re seeing emerge is how various DeFi models will continue to increase the significance of their role in facilitating peer-to-peer secondary market trading with minimal intermediaries, becoming increasingly prominent. This changes everything with respect to how we think about financial intermediation.
As a result, DeFi trading volumes in secondary markets are projected to hit $500 billion annually by the end of 2025, a 200% increase from 2023, while liquidity pools for tokenized assets could manage over $80 billion in assets, providing instant trading capabilities. Platforms will also use smart contracts to automate investor rights such as voting and dividend payments, attracting more institutional participation. Ultimately, DeFi adoption among institutional users could increase to 30% — compared to less than 10% in 2023 — due to improved governance and risk management tools.