In 2011, a16z founder Marc Andreessen published an article titled (Software Eats 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 past decade, we have witnessed rapid development of the Internet, giving rise to a series of companies with a market value exceeding $100 billion. Even now, this statement remains valid, as AI has begun to change the world in new ways, and some have suggested that AI is eating software, but it seems that all beginnings trace back to 2011, when our commonly used Weibo and WeChat both experienced an explosion.
And now, more than a decade after the birth of blockchain technology, we have finally welcomed the beginning of 'blockchain eating the world,' and this beginning is— the implementation of stock tokenization in the US.
Although stock tokenization in the U.S. is no longer a novelty and has even 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 and tokenized shares of some unlisted companies, including OpenAI and SpaceX. This news caused a huge stir in the financial sector and propelled Robinhood's stock price to break historical highs.
The total market capitalization of the entire cryptocurrency market is currently about $3.4 trillion, while the total market capitalization of the global stock market is about $135 trillion, with the two differing by nearly 40 times.
Conversely, the ultimate ceiling market for stock tokenization is 135 trillion, and as long as the market capitalization continues to grow, the ceiling will also be opened.
However, the current market share may be less than 0.1%, and it will be deemed that the industry has truly ushered in explosive growth when it can break through 3%.
And this is the future that these emerging trading firms are aiming for, as well as the true growth point of blockchain.
If this logic holds and is realized, then the impact brought by blockchain and cryptocurrency is no less than that of 'software eating the world.'
It can be expected that the next 1-2 years will be a period of wild growth for this industry, with more companies entering the market, which will also push some traditional stock service companies (TradFi) to transform; the door to this trend has already been opened.
But is stock tokenization the end point of blockchain? The author believes this is just an important step.
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 $2 trillion to $280 trillion, while the digital asset market (excluding Bitcoin) may grow from $1 trillion to $590 trillion.
Currently, there are three important turning points before us: one is the global craze for stablecoins, whether in the West or the East; the second is the continuous growth of on-chain scales for government bonds and money market funds, widely referred to as RWA; the third is the beginning of stock tokenization.
And the endgame scale mentioned by Michael Saylor is the market after all these assets are tokenized, and the potential arrival of true 'everything on-chain'—after all, this term has been mentioned for several years, from the lively STO in 2018 to the current RWA and stock tokenization, we have finally reached a critical point. Although the journey is still long and full of challenges, it is already on the way.
Although looking at these numbers now seems a bit fantastical, it is like saying ten years ago that Bitcoin would reach $100,000; it is similarly filled with drama and absurdity, and now it has reached $110,000 and continues to refresh its historical highs.
In the foreseeable future, we can see that blockchain is reshaping the presentation of assets and the way value is transferred; whether it will reshape the way information is transmitted remains to be seen; while AI is reshaping the way information is captured and bringing about productivity changes, the technology tree is now on the eve of an explosion.
Coincidentally, both technologies have been lurking for over 10 years, from being neglected to being filled with bubbles, and now to value reconstruction; perhaps it is time to unleash that 'monster.'
So, who will be the next major player to enter stock tokenization? We will wait and see.
This article is authorized for reprint from: (Foresight News)
Original title: (Why is stock tokenization in the US the beginning of blockchain eating the world?)
Original author: Blockchain Knight
‘The world is about to change! Why is stock tokenization in the US the beginning of blockchain eating traditional finance?’ This article was first published in ‘Crypto City’
