In 2011, a16z founder Marc Andreessen published an article titled 'Software is eating the world' in The Wall Street Journal, with the core argument that software is changing the world at an unprecedented speed and scale.
In the following decade, we witnessed the rapid development of the internet, giving birth to numerous companies valued over a hundred billion. Even now, this statement remains valid because AI is again changing the world in new ways. Some have even suggested that AI is consuming software, but it seems that everything started back in 2011, as we commonly use Weibo and WeChat, which experienced their explosion that year.
And now, more than a decade after the birth of blockchain technology, we have finally ushered in the beginning of 'blockchain eating the world,' and this beginning is—the realization of stock tokenization in the U.S. market.
Although stock tokenization in the U.S. is no longer a novelty, and had already been partially realized in the collapsed FTX, the players entering the market now are no longer purely crypto companies, but well-known internet enterprises like Robinhood.
Last week, Robinhood announced the launch of stock token trading services based on the Arbitrum network in Europe, tokenizing parts of the equity of unlisted companies, including OpenAI and SpaceX. This news caused a huge stir in the financial circle and propelled Robinhood's stock price to break its historical high.
The total market value of the entire cryptocurrency market is approximately $3.4 trillion, while the total market value of the global stock market is around $135 trillion, a difference of nearly 40 times.
Conversely, the ultimate ceiling market for stock tokenization is $135 trillion, and as long as this market value continues to grow, the ceiling will also be opened.
However, currently, it may account for less than 0.1% of the market. It will only be considered a true explosive growth in the industry when it surpasses 3%.
And this is the future that these emerging trading companies are targeting, as well as the true growth point of blockchain.
If this logic holds true and is realized, then the impact of blockchain and cryptocurrencies will be no less than that of 'software eating the world.'
It can be anticipated that the next 1-2 years will be a period of rampant growth in this field, with more companies entering the market, which will also force some traditional stock service companies (TradFi) to transform. The door to this trend has already been opened.
But is stock tokenization the end of blockchain? I believe this is just an important step among many.
At the end of last year, MicroStrategy's CEO Michael Saylor released a proposal titled 'U.S. Digital Asset Framework, Principles, and Opportunities,' in which he projected that the global digital capital market is expected to grow from $20 trillion to $280 trillion, while the digital asset market (excluding Bitcoin) could grow from $1 trillion to $5.9 trillion.
Currently, we are faced with three important turning points: one is the global craze for stablecoins, regardless of the West or the East; the second is the continuous growth of on-chain Treasury bonds and money market funds, commonly referred to as RWA; and the third is the beginning of stock tokenization.
The ultimate scale mentioned by Michael Saylor is the market for all these assets after going on-chain, and the potential arrival of true 'everything going on-chain'—after all, this term has been mentioned for years. From the lively STO in 2018 to the current RWA and stock tokenization, we have finally reached a critical point, though the journey remains long and full of challenges, it is already on the way.
Though it may seem far-fetched to look at these data now, it is akin to saying ten years ago that Bitcoin would reach $100,000—equally dramatic and absurd. And now it has reached $110,000 and continues to set new historical highs.
In the foreseeable future, we can see that blockchain is reshaping the form of asset presentation and the method of value transmission. Whether it will reshape the way information is conveyed remains to be seen; while AI is reshaping the way information is captured and bringing about a productivity revolution, the tech tree is now on the eve of an explosion.
Coincidentally, both technologies have been lurking for over a decade, from being ignored to being filled with bubbles, then to value reshaping. Perhaps it is time to unleash that 'monster.'
So, who will be the next major player to enter the stock tokenization space? We shall see.
