According to Cynthia Wu, the COO of Matrixport, in the next five to ten years, almost every traditional asset class could be converted into nonfungible tokens (NFTs). Wu believes that storing and trading real-world assets on-chain through NFTs would enhance their liquidity and tradability, leading to improved price discovery and transaction activity. While the current focus of NFTs has been on digital collectibles, Wu is confident that the adoption of NFTs for real-world assets will increase in the future.
A recent report by Boston Consulting Group (BCG) estimated that the total value of tokenized illiquid assets could reach $16.1 trillion by 2030. BCG predicts that the tokenization of pre-IPO stocks, real estate, private debt, and revenue from small to medium-sized businesses will contribute significantly to this growth. However, despite the interest from financial institutions, some have been hesitant to move away from legacy systems that have been reliable for them over the years.
Wu explained that the traditional financial system is not equipped for trading nonfungible assets, as they cannot be easily exchanged like divisible assets. However, blockchain technology provides a solution to this problem. Wu believes that blockchain infrastructure offers cost efficiencies, improved liquidity, 24/7 market access, and eliminates the need for intermediaries, making it a superior option to legacy systems.
Matrixport, founded in February 2019, currently manages $3-4 billion in digital assets for a diverse range of retail and institutional clients.