Property tokenization has been gaining traction among cryptocurrency enthusiasts as a new means of real estate investment, as the broader narrative of putting real-world assets on blockchain rails gains momentum. magnitude.
What happened: High property prices in major cities like London and New York have made direct property investment increasingly unaffordable, paving the way for tokenized real estate as a viable alternative, according to a Financial Times report .
Unlike real estate investment trusts (REITs) that own or finance large groups of commercial and residential properties, tokenized real estate allows for small-scale investment in individual properties.
In real estate tokenization, assets such as homes or hotels are divided into digital tokens that signify ownership. These tokens, which contain details such as asset ownership history and regulatory information, are stored on a blockchain, serving as a digital ledger.
When a real estate asset is split during tokenization, its liquidity increases. So instead of selling the entire property at once, owners of tokenized sections can sell their tokens quickly, resulting in a rapid change of ownership.
Additionally, thanks to blockchain technology, the market remains open 24/7 and with comparatively higher levels of transparency.
It’s really about convenience because the asset becomes liquid, it becomes tradable 24/7, and a global pool of investors has access to it. » Max Dilendorf, a New York-based digital assets lawyer, told the FT.
According to Prophecy Market Insights, the real estate tokenization market was valued at $3.8 billion in 2024 and is expected to reach $26 billion by 2034 with a compound annual growth rate (CAGR) of 2.90%.
Some of the biggest players in the industry at the time of this writing were Pupil, Real, And HouseBit.
See also: Man who accidentally dumped hard drive containing 8,000 Bitcoins worth half a billion dollars in landfill sues local city council for failing to search site
Why it matters: The rise of property tokenization was part of a broader narrative of real-world asset (RWA) tokenization that became the hottest trend in cryptocurrency this year.
The world’s largest asset manager, black rock entered the sector with the introduction of its US Treasury tokenized product, BUIDL, built on top Ethereum ETH/USDearlier this year. The fund boasted a market valuation of more than $550 million as of this writing, according to Rwa.xyz, a platform that tracks the tokenized assets market.
Antoine MoroCEO of Provenance Blockchain Labs and known industry expert, predicted that tokenization would become a trillion-dollar market by 2030.
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