Venture Capital Bets Big on Tokenization as Blockchain Use Cases Expand: Galaxy Report
Venture capital firms are maintaining their bullish outlook on cryptocurrency and blockchain startups in 2025, but their focus is shifting toward real-world applications, particularly in tokenising real-world assets (RWAs).
According to Galaxy Research, funding allocations are becoming more selective, prioritizing projects that bridge traditional finance with blockchain.
Real-world asset tokenization — turning traditional assets like bonds, real estate, and private credit into blockchain-based tokens — is rapidly becoming one of the most valuable sectors within the crypto space.
According to RWA.xyz, the total value of tokenized real-world assets reached $17.1 billion in early 2025, with private credit and U.S. Treasury debt leading the market.
While early blockchain investments were largely speculative — centered on cryptocurrencies, decentralized finance (DeFi), and NFTs — investors are now favoring financial products and services that integrate with traditional markets. This shift is particularly relevant as regulatory clarity improves in the U.S., making it easier for institutions to experiment with tokenized assets.
Galaxy Research noted that over 50 global financial institutions and major brands, including BlackRock, Deutsche Bank, and PayPal, are actively working on Ethereum-based tokenization solutions.
Why Tokenization Is a Game Changer for Finance
Tokenization allows traditional financial assets to be fractionalized, traded 24/7, and settled in real-time on blockchain networks.
This eliminates the inefficiencies of traditional financial markets, where trades can take days to settle and access to high-yield assets is often limited to institutional investors.
Imagine an investor who wants exposure to U.S. Treasury bonds but does not have the capital to buy them outright. Through tokenization, that investor can purchase a fraction of a tokenized Treasury bond, gaining access to stable yields without needing large upfront capital. This democratizes investment opportunities and opens up liquidity in traditionally illiquid markets.
Similarly, private credit, a market valued at $1.5 trillion, is being transformed through tokenization.
Investors can now purchase tokenized credit instruments, allowing for more flexible, transparent, and efficient lending. Firms like Apollo Global Management have already launched blockchain-based private credit funds, demonstrating how tokenization is becoming an integral part of financial markets.
Institutional Adoption and Regulatory Tailwinds
One of the biggest factors fueling tokenization’s rapid growth is institutional adoption.
According to Galaxy Digital, Ethereum remains the dominant blockchain for tokenized assets, hosting nearly 10 times more value than competing networks like Stellar. Of the 20 financial institutions currently building tokenized asset solutions, 13 are issuing RWAs on Ethereum, including BlackRock’s BUIDL fund.
Additionally, stablecoins (which mimic the price of a native currency, usually USD) — often used to facilitate tokenized asset transactions — have seen a 70% supply increase in 2024, driven by new entrants like PayPal’s PYUSD and Robinhood’s USDG.
With over 50% of the $400 billion stablecoin market on Ethereum, it’s clear that institutions are relying on blockchain infrastructure to create new financial instruments.
Regulatory clarity is also playing a key role. The SEC and other U.S. regulatory bodies have softened their stance on tokenization, acknowledging its benefits in financial markets.
How Tokenization Impacts Everyday Investors
Take, for example, an individual investor who wants to buy shares in a real estate investment trust (REIT). Traditionally, investing in real estate involves high fees, long holding periods, and limited liquidity. However, through tokenized REITs, investors can buy and sell fractional shares instantly on a blockchain, just like stocks.
Similarly, consider a small business owner looking to raise capital. Instead of applying for a bank loan, they can issue tokenized debt instruments, allowing investors to fund their business directly in exchange for tokenized bonds that provide fixed returns.
These use cases highlight why tokenization is not just another blockchain trend — it’s a financial revolution. By making assets more liquid, transparent, and accessible, tokenization creates opportunities that were previously unavailable to retail investors.
A Shift in Venture Capital Strategies
Venture capitalists are adjusting their investment strategies accordingly. HashKey Capital, for instance, sees greater value in investing in tokenization projects rather than traditional crypto exchanges or NFT platforms.
According to Messari, DePIN projects — which use blockchains to connect physical infrastructure with digital markets — raised over $350 million in 2024, showing strong investor confidence in blockchain’s ability to power real-world applications.
Galaxy Research’s report also notes a growing preference for consumer-facing blockchain projects over infrastructure-focused ones, indicating that venture capitalists believe the market is maturing and ready for mainstream adoption.
According to Security Token Market, the tokenized asset market could reach $30 trillion by 2030, far exceeding previous forecasts from firms like McKinsey ($2 trillion) and BCG ($16 trillion).
With $17.1 billion in tokenized assets already on-chain and financial institutions committing billions more, tokenization is no longer a niche experiment.
TokenFi’s RWA Tokenization Module
While the world is rapidly embracing tokenization, TokenFi is building a platform to make it simple for everyone — not just big corporations or tech experts. The goal is to give people an easy way to turn their real-world assets — whether it’s property, businesses, or creative ideas — into digital tokens without the hassle. With our upcoming RWA Tokenization Module, anyone will be able to tokenize their assets in just a few clicks, with no coding or technical expertise needed. It’s designed to be as simple as setting up an online account, ensuring a seamless, compliant, and user-friendly experience.
