Hi readers, Last week was Consensus Toronto 2025. Over 14,000 people from across 102 countries made the event legendary. If you couldn't attend, CoinDesk has you covered! Listen to amazing global thought leaders sharing their insights on pertinent topics surrounding the digital asset space from day 1, day 2 and day 3 of the event. You can also read the extensive editorial coverage. In this week's newsletter, Psalion's Alec Beckman outlines why crypto is expected to cross the 10% threshold of adoption in 2025.
Then, STM.co's Jason Barraza shares TokenizeThis 2025 key takeaways on RWA tokenization momentum and the remaining challenges to address.
Thanks for joining us. |
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Crypto's Market Penetration Tipping Point |
The digital assets market has transformed from a niche experiment into a global force reshaping finance, commerce, and technology. In May 2025, the global crypto market is valued at $3.05 trillion, growing at a pace on par with the internet boom in the 90s. A look at the growth curve Historical adoption curves for technologies like the internet and smartphones demonstrate that 10% penetration often marks a tipping point, after which growth accelerates exponentially due to network effects and mainstream acceptance. Digital assets are now on this trajectory, driven by rising user adoption, institutional investment and innovative use cases. After years of public uncertainty, a pivotal milestone may be achieved this year: cryptocurrency user penetration can surpass the critical 10% threshold, estimated to reach 11.02% globally in 2025 by Statista, up from 7.41% in 2024. The chart below compares the early user adoption curves of cryptocurrency and the internet. It highlights that crypto is growing at a significantly faster rate than the internet did in its early years. |
The 10% threshold: a catalyst for exponential growth With crypto expected to cross the 10% threshold of adoption in 2025, it is important to note that the 10% mark is not arbitrary —- it's a well-documented tipping point in technology diffusion, rooted in Everett Rogers' diffusion of innovations theory. This model shows that adoption shifts from early adopters (13.5%) to the early majority (34%) at around 10–15% penetration, marking the transition from niche to mainstream. Crossing 10% market penetration triggers rapid growth as infrastructure, accessibility and social acceptance align. Two very recent examples of this are the smartphone and the internet. For cryptocurrencies, surpassing 10% penetration in 2025 would signal a similar inflection point, with network effects amplifying adoption — more users increase liquidity, merchant acceptance and developer activity, making crypto more practical for everyday transactions like payments and remittances. In the U.S., 28% of adults (approximately 65 million people) own cryptocurrencies in 2025, nearly doubling from 15% in 2021. Additionally, 14% of non-owners plan to enter the market this year, and 66% of current owners intend to buy more, reflecting significant momentum. Globally, two out of three American adults are familiar with digital assets, signaling a sharp departure from its earlier speculative reputation. These figures underscore the growing mainstream acceptance of digital assets, aligning with the post-10% adoption surge observed in other transformative technologies. Crypto's economic impact spans remittances, cross-border trade, and financial inclusion, particularly in Africa and Asia, where it empowers the unbanked. Drivers of accelerated penetration Several factors are propelling crypto past the 10% threshold: |
- Blockchain technology: Its transparency and security support remittances, supply chain tracking, and fraud prevention, with Ethereum handling over 1.5 million daily transactions.
- Financial inclusion: Crypto enables financial access for unbanked populations, especially in Africa and Asia, via mobile and fintech platforms.
- Regulatory clarity: Pro-crypto policies in the UAE, Germany, and El Salvador (where bitcoin is legal tender) boost adoption, though uncertainty in India and China poses challenges.
- AI integration: Nearly 90 AI-based crypto tokens in 2024 enhance blockchain functionality for governance and payments.
- Economic instability: Crypto's role as a hedge against inflation drives adoption in markets like Brazil ($90.3 billion in stablecoin transactions) and Argentina ($91.1 billion).
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Institutional and business adoption Institutional and business involvement is accelerating digital assets' mainstream integration. Major financial players like BlackRock and Fidelity are going all in on crypto services and have launched crypto exchange-traded funds (ETFs), with 72 ETFs awaiting SEC approval in 2025. Businesses are adopting crypto payments to cut fees and reach global customers, particularly in retail and e-commerce. Examples include Burger King in Germany accepting bitcoin since 2019 and PayPal's 2024 partnership with MoonPay for U.S. crypto purchases. Platforms like Coinbase Commerce and Triple-A, alongside partnerships like Ingenico and Crypto.com, enable merchants to accept crypto with local currency settlements, reducing volatility risks. DeFi activity has increased significantly in Sub-Saharan Africa, Latin America, and Eastern Europe. In Eastern Europe, DeFi accounted for over 33% of total crypto received, with the region placing third globally in year-over-year DeFi growth. Challenges and acceleration ahead Despite its momentum, digital assets face hurdles: |
- Volatility: Crypto is a very volatile asset, often too volatile for institutional investors.
- Security concerns: Hacks, lost private keys and third party risks all contribute to uncertainty among investors.
- Regulatory scrutiny: Despite a very friendly U.S. government stance toward crypto and increasingly tolerant governments around the world, there are questions about how crypto will be treated across jurisdictions, specifically as they relate to securities.
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Still, the trajectory is promising. Bullish sentiment and crypto-friendly regulators, coupled with ETF momentum and payment integrations, underscore this trajectory. If innovation continues to balance out with trust, digital assets are likely to follow the internet and smartphone playbook — and grow even faster. |
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Tokenization is Full Steam Ahead… with Tracks Still Needing to be Built |
The tokenization of real world assets (RWAs) is gaining recognition from institutions seeking collateral mobility, issuers making private, alternative assets more accessible to retail investors and crypto enthusiasts engaging in more serious conversations as compared to the NFT and memecoin craze of past years. As predicted earlier this year, tokenization is solidifying its position and moving into the "pragmatists" portion of the adoption bell curve. 2024 ended with a $50 billion market cap and as of May 2025 has surpassed $65 billion, excluding stablecoins. A recent conference, TokenizeThis 2025, brought together industry leaders to dive deep into specific areas of the tokenization space, celebrating innovative accomplishments and evaluating how to tackle remaining challenges to reach mainstream adoption. While the conference panel topics delved into granular areas, a couple overarching themes to highlight include 1) collateral mobility and new utility enhancing real world assets and 2) the effects tokenization will have on investment strategies and workflows. Adding utility and collateral mobility "I think that's actually what makes this technology so powerful is that you're talking about the same token but it can be used in very different ways for very different investors as long as of course the risk framework is right," said Maredith Hannon, head of business development, digital assets at WisdomTree. While tokenizing assets is straightforward, the real opportunity lies in enabling more streamlined usage of assets compared to their traditional counterparts and addressing the needs of different participants. A panel dedicated to this topic shared examples of tokenized treasury products that can be used in both retail and institutional settings. Because blockchain allows an asset to move more freely, a money market fund could be used as collateral on a prime brokerage, eliminating the need to exit from that position thus still earning its corresponding yield for the investor. From a retail perspective, the same is possible with a different application where the fund units can be used for payment using a debit card linked to them. Utility can be added to other, higher risk investment products as well through different applications depending on the use case, with the common denominator being the use of blockchain technology. Along the same lines, lending and borrowing is being disrupted thanks to tokenization. Going to a traditional lender (usually an institution) for cash is a cumbersome process. "The end goal in my opinion would be that my kids when doing their first mortgage just apply anonymously on a mortgage saying 'this is my situation I want to borrow this for that' and then she just borrows it [from] many people at the same time and repaying stablecoins… it's already quite daunting to talk to 20 banks because you want to buy one apartment, at least this is how it works in France right now," said Jerome de Tychey, CEO at Cometh. Jerome's anecdote speaks to the power of decentralized finance for an individual and how it can fast-track a loan. Figure offers an internet-based solution for home equity lines of credit (HELOCs) and even they are using the blockchain in the backend. By issuing, warehousing and securitizing them, they've saved 150 bps out of the process — an operational advantage. From an investment standpoint, the DeFi vaults panel showcased how vaults streamline something similar but for investors, with an example being Apollo's tokenized private credit fund now using this technology to enable leverage loops. This means borrowed stablecoin can be used to buy more of the asset, increasing yield while being subject to a built-in programmatic risk framework. |
However, challenges remain to be solved before vaults can take off, such as high custody and liquidity provision costs, limited RWA composability in DeFi and minimal appeal to crypto-native users seeking higher returns. Despite these obstacles, participants expressed enthusiasm for future possibilities. How RWAs are impacting traditional strategies and workflows "The reason this technology is so powerful is because it's a computer. If you think about all the middle and back office work from originating an asset to selling it, how many intermediaries touch it and take fees, how many people ensure loan tapes match with received funds — bringing that workflow on-chain is far more meaningful than just focusing on the asset itself," said Kevin Miao, head of growth at Steakhouse Financial. Traditional markets have had a challenging time incorporating less liquid, higher yielding assets into investment strategies due to complex back and middle office needs for transfers, servicing, reporting and other factors. Automating transfer processes and providing on-chain transparency would make it easier for these assets to be allocated in and out of, in addition to cryptocurrencies introducing new investment opportunities. Cameron Drinkwater from S&P Dow Jones Indices and Ambre Soubiran from Kaiko discussed how blockchain will unlock previously inaccessible portfolio construction tools. They shared how this could result in blockchain-native investment strategies combining crypto and private asset allocations for greater diversification and new sources of yield. Achieving this, however, requires interoperability between legacy and blockchain-based infrastructure and between blockchains themselves. Some critical elements include aligning workflows, price transparency, rebalancing, on-chain identity, risk assessment considerations and risk management solutions. Providing maximum visibility into these assets and tools to navigate markets on-chain is one key step in. RWAs are shifting from theoretical blockchain to practical tokenized asset implementation in traditional and decentralized finance. The focus is now on enabling real utility through better collateral mobility, new financial products and more efficient workflows. By improving interoperability and identity frameworks, tokenization is expected to democratize illiquid assets and enhance financial efficiency. For additional recordings of the informational sessions, please visit STM TV on YouTube. |
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