Top analysts debate the future of ETFs, will tokenization take over?

There is currently an argument among Exchange Traded Fund experts and digital asset analysts that traditional ETFs will disappear over the next two decades as tokenized assets take over.

Tokenization to eradicate traditional ETFs

The conversation started on X with Niccole Bardoscia, Head of Digital Asset Trading at Intesa Sanpaolo. Sanpaolo noted that he spent his day with Eric Balchunas, senior ETF analyst at Bloomberg, and a few other industry experts on a panel discussing the topic. According to him, the subject of their discussion revolves around the sustainability of traditional ETFs and the implementation of tokenization.

Balchunas responded to the post, saying he enjoyed his time on the panel. However, he was quick to point out that he disagreed with some of the sentiments expressed. Balchunas believes that tokenization cannot be as simplified as what the ETF offers and might not appeal to many investors.

Therefore, the Bloomberg ETF analyst published a poll, asking for his followers’ opinions on how big they think the tokenization of real-world assets will take over the next twenty years.

Of the 1,048 responses it has received so far, around 57% believe tokenization will become more important than ETFs in the long term. 23% believe it is an overrated concept that has no capacity to grow at all. While the latter group, represented by 20%, is unsure of the direction tokenization will take.

One of those who strongly believes in tokenization’s ability to overtake ETF is Nate Geraci, president of ETF Store.

“I agree with Niccolo…” Geraci said. “There is a reason why BlackRock, Franklin Templeton, etc. already symbolize money market funds. Just the beginning.”

BlackRock and Floki Network join the bandwagon

Of note is BlackRock’s collaboration with the real-world asset tokenization giant Securitize supports Geraci’s assertion. In March, the US investment banking giant took a deep dive into the world of tokenization with Securitize. The duo launched a fund called USD Institutional Digital Liquidity Fund, a private equity offering.

The proposed tokenized fund requires outside investors to invest a minimum of $100,000. The filing submitted to the United States Securities and Exchange Commission (SEC) indicated that the estimated sales commission for the fund was $525,000 and that there was no finder’s fee.

In the same way, Floki Ecosystem launched TokenFi, its native tokenization project. All these integrations and support for tokenization suggest that the industry is experiencing a turning point that could become crucial in a few years.

Learn more: Dormant Ethereum Whale Wakes Up After 8 Years, 6,000 ETH Faces Selloff Risk

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Benjamin Godfrey is a blockchain enthusiast and journalist who enjoys writing about real-world applications of blockchain technology and innovations to drive mainstream acceptance and global integration of the emerging technology. His desire to educate people about cryptocurrencies inspires his contributions to renowned blockchain-based media and sites. Benjamin Godfrey is a lover of sports and agriculture. Follow him on Twitter, Linkedin

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