Ethereum (ETH) is poised for a resurgence in 2025 as it rides a wave of emerging trends to capitalize on a $100 trillion opportunity in tokenizing real-world assets (RWAs), according to a letter shared with investors by Bitwise’s senior investment strategist, Juan Leon.
The document highlighted that the crypto market was marked by two stories this year: Bitcoin’s (BTC) new all-time high, driven by the adoption of spot exchange-traded funds (ETF) in the US, and Solana’s massive popularity ( SOL) as private investors. piled into memecoin speculation.
As a result, Ethereum’s 66% year-over-year return paled compared to BTC’s 130% gain and SOL’s 106% rally.
ETFs signal changes
However, recent signals indicate a turnaround in sentiment. Over the past ten days, Ethereum ETFs have attracted a staggering $2 billion in net inflows, eight times the $250 million net inflows recorded in the previous four months.
On December 5 facts of Farside Investors pointed out that spot Ethereum ETFs traded in the US recorded inflows of $428.5 million, a new daily record propelled by $292.7 million targeting BlackRock’s ETHA.
Additionally, Ethereum ETFs have seen sub-triple-digit daily inflows in just 3 of the past 10 trading days.
This increase indicates that institutional and retail investors are warming up to Ethereum again.
RWA growth
The tokenization of real-world assets could be the fuel for Ethereum’s revival. This process involves digitizing traditional assets – such as treasury bills, real estate and commodities – into blockchain-based tokens, enabling faster, cheaper and more efficient trading and settlement.
Tokenization is no longer a distant dream. Major players such as BlackRock, Franklin Templeton and UBS have adopted blockchain technology to tokenize RWAs. BlackRock’s tokenized treasury fund, BUIDL, currently has a market cap of $544 million.
According to the letter, real assets worldwide are valued at roughly $100 trillion, creating a staggering opportunity. While it may take decades for significant portions of this market to transition to blockchain rails, Leon sees enormous upside potential.
Given that Ethereum has 81% of the RWA market, Leon estimates that fees generated from RWA-linked activity on Ethereum could eventually exceed $100 billion annually, more than 40 times the $2.4 billion it network has paid in fees to date.
The letter attributes Ethereum’s dominance to its status as the most trusted and decentralized smart contract platform, secured by its long history of supporting decentralized applications and its extensive distributed validator network.
As the world’s largest asset managers explore tokenized assets, Ethereum remains the “battle-tested” standard. Furthermore, regulatory tailwinds could accelerate this transformation, setting Ethereum up for potentially explosive growth.
The letter noted that an increasingly pro-crypto U.S. Securities and Exchange Commission (SEC) could provide much-needed clarity, removing barriers to adoption and institutional participation.
