Ethereum (ETH) is predicted to experience a resurgence in 2025, capitalizing on a $100 trillion opportunity in tokenizing real-world assets (RWAs), according to a letter shared with investors by Bitwise’s senior investment strategist, Juan Leon. The letter highlighted that the crypto market was marked by two narratives this year: Bitcoin’s (BTC) new all-time high, driven by spot exchange-traded funds (ETF) approval in the US, and Solana’s (SOL) meteoric popularity as retail investors piled into memecoin speculation.
Ethereum’s 66% year-to-date return paled in comparison to BTC’s 130% gain and SOL’s 106% rally. However, recent signs suggest a reversal of sentiment. Over the past 10 days, Ethereum ETFs have attracted a staggering $2 billion in net inflows, eight times the $250 million net inflows recorded in the preceding four months.
This surge indicates that institutional and retail investors are warming up to Ethereum again. Tokenization of real-world assets might be the fuel for Ethereum’s resurgence. This process involves digitizing traditional assets, such as Treasury bills, real estate, and commodities, into blockchain-based tokens, offering faster, cheaper, and more efficient trading and settlement.
While it could take decades for significant portions of this market to shift to blockchain rails, Leon sees immense potential upside. Considering that Ethereum holds 81% of the RWA market, Leon estimates that fees generated from RWA-linked activity on Ethereum could ultimately surpass $100 billion annually, more than 40 times the network’s $2.4 billion in fees year-to-date.
The letter attributes Ethereum’s dominance to its status as the most reliable and decentralized smart contract platform, secured by its long history of supporting decentralized applications and its vast distributed validator network. As the world’s largest asset managers explore tokenized assets, Ethereum remains the “battle-tested” standard.
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