From the dot com boom to the first coin offering (ICO) trend, we’ve seen a significant share of the “hype cycle.” It’s definitely the latest buzzword. But seeing past trends rise and fall directly, I can tell you this is different. why?
Why Tokenization doesn’t follow the path of the ICO boom
Below is an opinion editorial written by Eric Pissini, CEO of Hashgraph.
To answer this, take a step back and open a few pages from history. It can be seen that some of the biggest bubbles of the 20th century came from innovations that captured people’s imagination before real-world utility became clear and sound regulations were introduced.
It took the dot-com boom of the late 90s. The internet was poised to change everything, but speculations have outperformed many core business realities, including revenue, sustainable growth, and profitability, leading to a crash that wiped out more than $5 trillion in market value. The 2008 financial crisis was caused by a lack of regulations that allowed leveraged mortgage-backed securities and opaque financial products to be entangled in the global economy. Similarly, unregulated token sales were behind the 2017 ICO boom. When reality finally caught up with the hype, millions of projects quickly disappeared in one night.
At the same time, history also shows that the dot.com bubble didn’t kill the internet and the collapse of ICOs was not the end of blockchain. Instead, these earthquake moments refined and increased the quality of the project being built. For example, adopt the 2008 crash. It devastated the global economy, but also led to stronger regulations, greater transparency and better risk management to prevent it from happening again.
Learning from history and ensuring that tokenization provides all the right guardrails and real-world value to protect consumers and businesses, the current wave of growth changes from mere speculation to the foundations of a more transparent, efficient and resilient financial system.
The effort is already underway. One of the biggest concerns about tokenization is the lack of real-world utilities. We’ve all seen “meme tokens” surge and collapse overnight. But tokenization has already proven its value as we know it, as a way to modernize and fundamentally change asset management. For example, similar to the US Treasury Department, institutional grade tokenized assets are adopted by major financial giants such as BlackRock, JPMorgan, and HSBC.
Actual applications further validate trends. Tokenized ETFs, carbon credits and financial products are already increasing the efficiency of the market. Recently, industry giant Franklin Templeton joined companies such as Canary Capital, Grayscale and WisdomTree to apply for tokenized ETFs. Meanwhile, Stubcoin, also known as the once-experimental tokenized cash, is currently capturing a $25 billion market for global payments and settlements. The concept is not new, but it has ultimately made progress. It is proof that actual innovation takes time to match the product market.
Similarly, regulators have adapted to ensure that digital assets develop responsibly, as fragmented markets and inconsistent surveillance pose risk. Tokenized Real World Assets (RWAs) provide opportunities, but without a proper risk assessment can threaten financial stability and reduce investor protection. Just like traditional markets, liquidity management and due diligence are important.
To address these risks, policymakers are pushing for standardized frameworks. The US has recently taken bold steps to establish itself as a leader with the appointment of “crypto CZAR,” which focuses on providing regulatory clarity. Europe continues to move forward with MICA, the UK endures with the FCA crypto roadmap, Hong Kong introduces a licensing regime for crypto exchanges and tokenized securities, and the UAE’s Virtual Asset Regulator (VARA) is setting new standards for digital asset monitoring.
However, digital assets are inherently decentralized and operate across borders. This requires global adjustments. Without regulatory alignment, even strong frameworks are short of. To ensure tokenization, rather than becoming unstable, regulators and the private sector need to work together on clear governance to ensure interoperability and long-term stability to strengthen financial markets rather than becoming precarious.
With accelerated institutional momentum, regulatory advancements, and real-world adoption, tokenization is becoming more than the “trend” passed on. Ultimately, its success depends on how we continue to navigate and process risk, so tokenization can seamlessly integrate and become the 10T+ market by 2030.
What’s more, creating a strong secondary market for all kinds of tokenized assets is unlocking access to all asset classes around the world. Everyone in the world will invest in just a few minutes in real estate projects in other countries and claim victory when they can sell with regulatory and technology frictions in two weeks.
When we’re there, investors don’t focus on mechanics, just as they don’t consider the technology behind stocks and bonds today. They focus on the real world values that unlock. Employee stock investments are transparently managed through a chain, companies ensure instant financing with tokenized inventory, and real estate, goods and intellectual property are traded seamlessly as digital assets.
Just like the early Internet, tokenization is at the point when its true value is revealed. It’s not a bubble waiting for utopian ideas or pop. It is the future of financial infrastructure. The next step is not to prove that it works. It is to take advantage of the potential to shape industries and markets worldwide. It is up to us to responsibly shape that future now, ensuring that tokenization stands the test of time.
