Grayscale believes tokenized assets need stronger legal protections, reliable valuations, and sound credit assessments before attracting wider institutional investment. Sebastian Pulido, Grayscale’s Managing Director and Head of Onchain Asset Management, says tokenization alone cannot guarantee market liquidity. His comments highlight the importance of building investor confidence as blockchain-based financial products expand.
Tokenization Faces Liquidity and Valuation Challenges
Pulido warned that converting illiquid assets into digital tokens does not automatically make them easier to trade. Consequently, lending markets need dependable valuations and clear redemption processes to protect investors.
Additionally, tokenized equities offer investors another way to access market exposure without paying perpetual futures funding costs. However, differences in traditional market hours and continuous blockchain trading create operational challenges.
Tokenized shares also serve as collateral for loans and perpetual futures positions. Nevertheless, fragmented liquidity across blockchain networks could limit their broader adoption.
Institutional Adoption Could Accelerate
Pulido noted that institutions currently prefer holding tokenized funds over using them in decentralized finance. However, greater familiarity with blockchain protocols could gradually change institutional behavior.
Moreover, he expects financial markets to prioritize actual token usage over headline market valuations by 2030. By 2040, more assets could originate directly on blockchain networks. Meanwhile, transparent credit monitoring could replace traditional reporting practices.
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