Connect with us
DAPA Banner

Crypto World

Asset Tokenization Boosts Efficiency but Brings New Risks

Published

on

Crypto Breaking News

The International Monetary Fund has highlighted both the promise and the peril of tokenization in finance. In a 23-page assessment released this week, the IMF said tokenization could reduce friction and increase transparency across issuance, trading, settlement and asset management. Yet it warned that the same technology could also introduce risks that might affect financial stability, especially as speed and automation enable rapid, automated flows that leave less room for traditional oversight.

The IMF’s analysis stresses that while atomic settlement and enhanced visibility can mitigate some longstanding dangers, the accelerated pace of tokenized markets could give rise to new systemic stress if controls aren’t aligned with legal and supervisory clarity. A central finding remains: “The net effect of tokenization on financial stability is uncertain,” the IMF wrote, underscoring the delicate balance between improved efficiency and new risk vectors.

Key takeaways

  • Tokenization reduces some traditional risks through faster settlement and greater transparency, but speed and automation introduce new financial-stability challenges.
  • On-chain tokenization of real-world assets has surpassed $27.6 billion, excluding stablecoins, according to RWA.xyz data, highlighting growing industry activity.
  • Long-run forecasts for the tokenization market vary widely—BCG in 2022 projected up to $16 trillion by 2030, while McKinsey in 2024 offered a more conservative $2 trillion—the gap reflecting differing assumptions about liquidity, regulation and adoption.
  • Legal clarity over ownership records and settlement finality remains a bottleneck; the IMF notes fragmented markets could hamper widespread use unless governance keeps pace with technology.

The economic arc of tokenized real-world assets

The IMF’s report acknowledges that tokenization expands how securities and other financial products are issued, traded, settled and managed. But it also cautions that the technology effectively shifts some systemic risk from traditional banking rails to shared ledgers and smart contract code. In a phrase that captures the urgency for policymakers, the IMF warned that “stress events in tokenized markets are likely to unfold faster than in traditional systems, leaving less time for discretionary intervention.”

On the demand side, tokenization is being seen as a means to accelerate cross-border payments, broaden financial inclusion and unlock new channels for capital flow in emerging markets. Yet, the IMF also flags potential downsides: greater volatility in capital moves, rapid currency substitution and a perceived erosion of monetary sovereignty if participants rely on programmable money without adequate supervisory guardrails.

While the IMF is cautious, market participants are moving ahead. Real-world asset (RWA) tokenization has already drawn substantial traction. As of early April, data from RWA.xyz show more than $27.6 billion of real-world assets tokenized on-chain, excluding stablecoins. The scale of this segment points to a broader appetite among institutions to digitize assets like receivables, property interests and other non-tokenized holdings.

Advertisement

In the broader market outlook, the debate centers on scalability and liquidity. Industry studies have delivered mixed signals about the ultimate size of the opportunity. Boston Consulting Group estimated in 2022 that the tokenization market could swell to as much as $16 trillion by 2030, while McKinsey & Co. offered a notably more cautious projection of around $2 trillion for the same horizon. The IMF’s assessment sits between these bounds, emphasizing potential but underscoring the need for robust risk management as the ecosystem grows.

Industry momentum and notable players

Interest from Wall Street has been a key driver. High-profile figures such as BlackRock CEO Larry Fink have signaled support for tokenizing a broad spectrum of assets—from equities and bonds to money market funds and real estate—marking a shift in institutional attitudes toward on-chain representations of traditional instruments.

Within the on-chain asset category, Securitize has emerged as a leading platform by total value locked (TVL) in real-world asset tokenization. Securitize powers the BlackRock USD Institutional Digital Liquidity Fund, a major RWA project with reported TVL around $3.38 billion, per CryptoDep’s April data. Closely following are Tether Gold and Ondo Finance, with roughly $3.35 billion and $3.21 billion in TVL, respectively, underscoring a crowded field of tokenized wealth vehicles aimed at institutional investors.

Source: CryptoDep (April data) showing Securitize at about $3.38B TVL, with Tether Gold and Ondo Finance nearby.

Beyond tokenized assets themselves, the traditional exchanges are signaling their intent to bring tokenization into mainstream trading and settlement. Intercontinental Exchange, the parent company of the New York Stock Exchange, announced in January that it would launch a tokenization platform designed for 24/7 trading and instant settlement of stocks and exchange-traded funds via a blockchain-based post-trade system. The move indicates a direction where tokenized securities could become an integrated, continuous-source of liquidity rather than a niche, off-hours exercise.

Advertisement

Standards, regulation and practical controls

One of the IMF’s pointed critiques centers on legal and regulatory clarity. Without well-defined ownership records and settlement finality, tokenized markets risk becoming fragmented and peripheral to the broader financial system. In response, the industry has begun embracing standards and access controls to align technology with regulatory expectations.

Among the notable technical developments is the Ethereum ecosystem’s ERC-3643 standard, which enables permissioned access to tokenized assets and imposes identity and eligibility checks for holders. In practice, this standard is already being applied by some tokenized products to ensure compliance with investor requirements. A concrete example cited in the industry press is Coinbase Asset Management’s tokenized shares for the Coinbase Bitcoin Yield Fund, issued on the Base network (an Ethereum Layer 2). The fund leverages ERC-3643 to verify holder identity and eligibility during tokenization and post-trade processes.

The IMF also points to the broader regulatory architecture around stablecoins, cross-border flows and monetary sovereignty as areas that require ongoing attention as tokenized markets scale. The balance between enabling innovation and preserving monetary policy effectiveness will be a central theme for policymakers over the coming years.

What to watch next

As tokenization marches from pilot projects to greater market participation, investors and builders will be watching several key dynamics. First, whether legal frameworks and settlement finality standards crystallize in a way that reduces fragmentation and reassures traditional market participants. Second, whether liquidity continues to grow in real‑world asset tokens to the point where they rival or surpass traditional offline channels. Third, which infrastructure—clearing, custody, identity verification, and cross-border rails—will emerge as the de facto backbone for scalable tokenized markets. And finally, whether central banks and regulators adopt a calibrated stance that supports innovation without sacrificing financial stability.

Advertisement

In the near term, a handful of large players and platforms—creators of RWA markets, major asset managers experimenting with tokenized funds, and exchange operators expanding tokenized trading—will likely shape the pace and direction of adoption. The IMF’s findings suggest this is not a one-off tech experiment but a continental shift in how assets are created, traded and settled—one that demands careful risk governance as the ecosystem matures.

Readers should monitor developments around legal clarifications for tokenized ownership, concrete liquidity metrics for tokenized assets, and the progression of compliant standards like ERC-3643 as the market seeks a balance between efficiency and resilience.

Risk & affiliate notice: Crypto assets are volatile and capital is at risk. This article may contain affiliate links. Read full disclosure

Advertisement

Source link

Continue Reading
Click to comment

You must be logged in to post a comment Login

Leave a Reply

Crypto World

Bitcoin weathered 85% drawdown, eyes $34K

Published

on

Crypto Breaking News

Bitcoin’s drawdown narrative is shifting from a pattern of extreme collapses to a more mature market dynamic, according to Cathie Wood, the founder and CEO of ARK Invest. In a CNBC appearance on Squawk Box dated April 1, Wood argued that the era of 85% or greater corrections may be behind BTC, framing the asset as a proven technology and monetary tool rather than a volatile tech experiment.

Speaking amid a price backdrop around the 69,000 level—the prior all-time high reached in 2021—Wood’s remarks come after a long bear market that wiped out roughly 80% of BTC’s value before a bottom near 15,600. On-chain data, however, suggest the current downturn has not yet mirrored the depth seen in prior cycles. Glassnode data indicate the bear market’s maximum drawdown from BTC’s peak remains well short of past extremes, around 52% from the record high of about 126,200 in October 2025.

Key takeaways

  • ARK Invest’s Cathie Wood argues Bitcoin is past the era of 85%+ price collapses, framing BTC as a proven technology and monetary asset rather than a speculative fad.
  • Analysts disagree on the next significant price level: a chartist forecast points to roughly $34,000 as a bottom (a 72% drawdown), while consensus from broader coverage points to a range of roughly $40,000 to $50,000.
  • On-chain data show the bear market depth to date is shallower than in some previous cycles, with maximum drawdown around 52% from the all-time high, suggesting a potentially different extinction-like pattern for BTC.
  • April seasonality and near-term momentum remain in focus: some analysts see historical patterns of spring recoveries during bear phases, while macro headlines and liquidity conditions continue to influence the path forward.

Wood’s view: BTC’s maturation and the new normal

Wood’s comments came during a dialogue about Bitcoin’s long-run narrative. She stressed that the 85–95% declines associated with earlier, less mature markets are unlikely to recur for Bitcoin, a narrative she frames as evidence of BTC’s transformation into a validated monetary system and a new asset class. The remarks echo her longstanding bullish stance on Bitcoin, which has been a hallmark of ARK’s research orientation toward disruptive technologies.

At the time of her appearance, Bitcoin was hovering near the post-2021 high watermark—an area that previously marked the transition into a multi-quarter bear cycle. Wood’s perspective contrasts with the more cautious or range-bound themes that have dominated much of the current trading backdrop, where macro conditions, policy signals, and sector rotation often determine day-to-day moves.

That said, Wood’s optimism sits alongside a chorus of caution from other analysts who note that the road ahead remains data-driven and uncertain—a reminder that even as BTC stabilizes, macro headwinds can quickly reassert themselves.

Advertisement

Forecasts diverge on the floor of the bear market

While Wood’s stance centers on BTC’s maturation, other voices point to specific downside scenarios. Tony Severino, a veteran market technician, floated a bottom near $34,000, implying a 72% drawdown from the peak. He summarized the trajectory in a post on X, suggesting that a decline to that level would mark a “max drawdown” consistent with a new phase for the asset.

Beyond Severino’s projection, broader market commentary remains split. A section of traders and analysts continues to anticipate a bottom in the higher $40,000s to low $50,000s, a range that Cointelegraph has cited in prior coverage as a common region for a generational floor rather than a catastrophic collapse. For some observers, the 40k–50k zone remains the anchor for a long-term re-rating of Bitcoin’s risk profile.

Meanwhile, Bloomberg Intelligence analyst Mike McGlone has warned that prices could be trending toward seven-year lows, underscoring the risk that macro developments—such as central-bank policy and global liquidity—could extend the bear phase even as on-chain metrics offer a more nuanced view of drawdown depth.

Seasonality, on-chain signals, and what to watch next

Seasonality has long been cited as a potential internal driver of Bitcoin’s price path. Timothy Peterson, a network economist and commentator, highlighted a pattern in which April historically functions as a turning point during bearish cycles. A chart he shared on X illustrates April as a potential inflection month in past bear phases, though whether that dynamic repeats remains contingent on broader market conditions.

Advertisement

March’s monthly close added a modest, 1.8% gain for BTC/USD, effectively ending a five-month losing streak. The move, while not dramatic, keeps the door open for a spring rebound, provided macro momentum aligns with technical and on-chain signals.

On-chain context adds another layer to the discussion. Glassnode’s analysis shows that the current bear market’s depth—though material—is not yet aligned with the most severe declines observed historically. The all-time high of roughly 126,200 in October 2025 has given way to a drawdown of about 52%, a figure that suggests the market could behave differently than in previous cycles if macro conditions stay supportive or liquidity improves.

For investors, this combination of on-chain resilience and mixed macro signals creates a nuanced backdrop. A Bitcoin trading environment shaped by a less severe drawdown yet ongoing external headwinds could translate into a more protracted consolidation rather than a sharp capitulation or a swift breakout. Observers will be watching for signs of sustained demand, improving liquidity in risk markets, and any shifts in policy that could alter the risk-reward calculus for crypto exposure.

As the calendar turns to April, market participants will parse a mix of seasonality whispers, data-driven cautions, and evolving macro narratives. The next several weeks could prove decisive in whether BTC resumes a broader uptrend, remains range-bound, or teeters on renewed volatility as external conditions shift.

Advertisement

This article synthesizes observations from multiple sources, including Cathie Wood’s CNBC discussion, on-chain data from Glassnode, and commentary from market analysts such as Tony Severino and Mike McGlone, as well as prior coverage from Cointelegraph on price floors and seasonality in Bitcoin’s bear markets. Investors should treat forecasts as probabilistic scenarios rather than certainties and remain mindful of the evolving macro landscape that continues to shape crypto markets.

Risk & affiliate notice: Crypto assets are volatile and capital is at risk. This article may contain affiliate links. Read full disclosure

Source link

Advertisement
Continue Reading

Crypto World

Cartesi price jumps over 100% as it hits Stage 2 security status, can it go higher?

Published

on

Cartesi price has broken out of a descending parallel channel pattern on the daily chart.

Cartesi token soared over 100% to a 3-month high of $0.049 on Friday. Will the Layer 2 token edge higher over the coming sessions, or will it succumb to profit-taking?

Summary

  • Cartesi price surged over 100% to a three-month high amid a sharp rise in trading volume and a short squeeze.
  • The rally was driven by progress toward L2BEAT Stage 2 status and growing developer activity around Cartesi Machine deployments.
  • Technical indicators show overbought conditions and profit-taking signals, with CTSI price at risk of a pullback toward $0.030 support.

According to data from crypto.news, Cartesi (CTSI) price rallied nearly 110% to $0.049 on Friday, reaching its highest level since November 2022.

The rally came in a high-volume trading environment. In the past 24 hours,  the daily trading volume of Cartesi rose 1,260%, suggesting a sharp rise in demand from traders that likely buoyed the token toward its highs today.

Advertisement

There are three main reasons why Cartesi price broke out today.

First, Cartesi’s Permissionless Refereed Tournament fraud-proof system is reportedly nearing the Stage 2 classification by L2BEAT. This milestone would rank it among the most secure and decentralized Layer 2 scaling solutions, setting it apart from competitors that still rely on permissioned validators.

Second, the project’s recent initiative to ship high-throughput applications reached critical implementation deadlines in April. Tangible developer interest in the Cartesi Machine, which allows decentralized apps to run on Linux, is finally translating from theoretical potential into live deployments.

Advertisement

Third, after months of trading in a narrow range of $0.02 to $0.025, the sudden break above long-term resistance triggered a volatility spike. This caused a short squeeze, forcing bearish traders to buy back their positions and further fueling the massive gains seen today.

On the daily chart, Cartesi price has broken out of a multi-month descending parallel channel pattern, a sign that bulls have finally gained control of the market. It has already attained the target level from the breakout, suggesting there could be some selloff on the horizon.

Cartesi price has broken out of a descending parallel channel pattern on the daily chart.
Cartesi price has broken out of a descending parallel channel pattern on the daily chart — April 3 | Source: crypto.news

Such selloff risks also come as the relative strength index has crossed the overbought threshold. Crypto rallies often face some pullback when this metric hits an overbought state.

Additionally, the Chaikin Money Flow index showed a negative reading, a sign that investors have started to rotate capital or take profits at these higher levels.

Hence, the Cartesi token could likely retest its immediate support of $0.030 before its next leg higher.

Advertisement

Disclosure: This article does not represent investment advice. The content and materials featured on this page are for educational purposes only.

Advertisement

Source link

Continue Reading

Crypto World

Cathie Wood Sees No More 85% Bitcoin Price Drawdowns Versus All-Time Highs

Published

on

Cathie Wood Sees No More 85% Bitcoin Price Drawdowns Versus All-Time Highs

Bitcoin (BTC) is “done” with drawdowns of 85% or more from all-time highs, says ARK Invest CEO, Cathie Wood.

Key points:

  • Bitcoin will not see another correction of 85% or more versus its latest all-time high, Cathie Wood argues.

  • A new prediction sees $34,000 becoming the next BTC price bottom.

  • Bitcoin bear-market seasonality hints that a reversal could come this month.

Wood on BTC price: No more 85% “collapses”

In an interview with CNBC’s Squawk Box segment on April 1, Wood stayed calm about double-digit BTC price losses.

“Believe it or not, in the Bitcoin community, down 50% — if that’s as far as it goes — they’ll consider that a real victory,” she said.

Advertisement

“Because you’re right; the 85-95% collapses associated with a very new technology — that’s done. This is a proven technology, it’s a proven monetary system and it’s a new asset class.”

Wood, a longtime Bitcoin bull, was speaking as Bitcoin circled its old $69,000 all-time highs from 2021.

Those preceded a year-long bear market in which BTC/USD lost nearly 80% before bottoming at $15,600. That marked the latest such correction, with bear markets typically bringing losses around the 80% mark.

Data from onchain analytics platform Glassnode shows that the current bear market has yet to match historical patterns with maximum downside versus Bitcoin’s $126,200 record from October 2025 at 52%.

BTC price drawdowns from all-time highs. Source: Glassnode

Responding to Wood, analyst Tony Severino predicted that 2026 would bring a price bottom equal to a 72% drawdown.

“Correct, -72% max drawdown next =$34,000,” he wrote on X.

Advertisement

That figure exceeds commonly held predictions by traders for where Bitcoin’s next generational floor will be. As Cointelegraph reported, consensus favors the area between $40,000 and $50,000.

This week, however, Bloomberg Intelligence analyst Mike McGlone warned that price may already be trending toward seven-year lows

Bitcoin historically rebounds in April

Continuing the bear-market comparison, data from network economist Timothy Peterson revealed that April could mark some form of inflection point for price.

Related: Bitcoin risks new lows as US dollar targets highest level since April 2025

Advertisement

A chart uploaded to X this week shows April typically being a recovery month during bearish phases. 

Bitcoin bear-market price comparison. Source: Timothy Peterson/X

The March monthly close, meanwhile, ended a five-month losing streak for BTC/USD with modest gains of 1.8%.