Author: Juan Leon, Senior Investment Strategist at Bitwise; Edited by: 0xjs@Jinse Finance
In 2024, two key narratives dominated the headlines in cryptocurrency: Bitcoin's rapid rise driven by the launch of Bitcoin ETFs and record capital inflows; and Solana becoming the darling of retail investors, driven by speculation around meme coins.
This has largely overlooked Ethereum - the world's second largest crypto asset. Of course, in absolute terms, its 66% return year-to-date is quite good, but it pales in comparison to Solana's 106% and Bitcoin's 130%.
But something interesting has happened recently: investors have started to take an interest in Ethereum again over the past 10 days.
You can clearly see this in spot Ethereum ETFs, which have attracted up to $2 billion in net inflows during this period. In contrast, the same ETFs had only $250 million in net inflows in the first four months.
So what happened here?
When I reviewed Bitwise's recently released 2025 crypto predictions, I suddenly realized this. Among various price forecasts, we proposed several 'real-world' big trends that we believe will shape the industry in the coming year, from the continued rise of stablecoins to the surge of AI agents using cryptocurrencies for trading.
But one of the biggest and most easily overlooked opportunities lies in tokenization: the process of bringing the vast real-world asset (RWA) market onto the blockchain.
Today, this market is dominated by Ethereum.
"This is not just a story for tomorrow"
Tokenization refers to the process of digitizing traditional financial assets (such as treasury bonds or real estate) into tokens that can be traded on the blockchain. Tokenization is expected to make the buying, selling, and settlement of financial assets faster, cheaper, and more digital. Many believe it could disrupt the fundamental basis of how financial markets operate.
This is not just a story for tomorrow. Tokenized assets are currently growing rapidly, with companies like BlackRock and UBS bringing tokenized real-world assets onto the network, covering government securities, commodities, real estate, private equity, etc. For example, BlackRock has a $578 million tokenized treasury bond fund and is looking to do more. We believe that tokenized fund assets will triple next year, with Ethereum being the driving force behind it.
Why Ethereum?
To use an old saying: You won't get fired for building on Ethereum.
Ethereum is the most battle-tested, secure, and decentralized platform among smart contract platforms. Since its inception in 2015, it has become a leader in decentralized applications, smart contracts, and tokenization. It currently holds an 81% market share in the tokenized asset market, and its long track record and large distributed validator network give asset managers confidence in its security and reliability when moving assets on-chain.
Here's the thing: it's hard to overstate how large the RWA market is. The global value of real-world assets is approximately $100 trillion. Most of these assets will take time (perhaps decades) to move to a tokenized path. But if that were to happen, the fees associated with RWAs could exceed $100 billion annually. That's more than 40 times Ethereum's total fees of $2.4 billion year-to-date. With the incoming crypto-friendly SEC likely to provide the regulatory clarity needed to accelerate tokenization, investors betting on Ethereum now may see substantial returns in the near future.
This is just one of many reasons we believe 2025 will be the year Ethereum returns to its peak.
