Bitcoin Drops 27% Amid Trade War Fears, BlackRock Predicts $19 Trillion Tokenisation Growth

Bitcoin and other cryptocurrencies have experienced significant volatility due to the escalating global trade war initiated by the U.S. president. This has led to a shock warning from Michael Saylor’s Strategy, advising a bitcoin “sell” due to the market's instability. The bitcoin price has dropped to under $80,000 per bitcoin, down from a January peak of almost $110,000, resulting in a loss of $1.3 trillion from the combined crypto market, including ethereum and XRP. Fears of a looming “crisis scenario” have been circulating, adding to the market's uncertainty.

Treasury secretary Scott Bessent has issued a surprise prediction that the BlackRock-powered, crypto-based tokenisation of assets is forecast to grow "exponentially” from $600 billion now to $19 trillion by 2033. This prediction comes as financial institutions increasingly view tokenisation as a strategic path in the evolution of finance. BlackRock, the world’s largest asset manager, has been at the forefront of this push, leading the way for tokenisation on Wall Street. The report, titled “Approaching the tokenisation tipping point," highlights that tokenisation is no longer a side project but a critical step in the financial industry's development.

According to the report, global adoption of tokenisation is poised to grow exponentially. This growth is driven by the increasing interest in real-world assets and the potential of tokenised assets to address historically under-penetrated segments. The recent support from Wall Street giants, including BlackRock, has further boosted the bitcoin price and the wider crypto market, including ethereum and XRP. BlackRock, which manages over $10 trillion globally on behalf of clients, led the campaign last year to bring a fully-fledged spot bitcoin ETF to the U.S., winning approval for its IBIT and a fleet of other spot bitcoin ETFs in January.

In July, BlackRock's chief executive Larry Fink admitted that he had been "wrong" about bitcoin, previously dismissing it as "an index of money laundering." He now acknowledges bitcoin as "digital gold” and a "legitimate" financial instrument. Fink's revelation about the crypto-based tokenization of assets on blockchains is seen as a significant step towards a digital "revolution" on Wall Street. This transformation includes the tokenization of various financial instruments, from stock markets and pre-IPO stocks to hedge funds, infrastructure projects, commodities, alternate investment instruments, and private credit.

BlackRock’s global head of strategic ecosystem partnerships, Joseph Chalom, has stated that the company believes tokenization has the potential to drive a significant transformation in capital markets infrastructure. BlackRock’s investment in Securitize is another step in the evolution of their digital assets strategy, further solidifying their commitment to the tokenisation of assets. The market's volatility and the potential for exponential growth in tokenisation highlight the critical role that cryptocurrencies and blockchain technology will play in the future of finance.