Institutional Interest in Tokenization Grows Despite Bitcoin Price Fluctuations

According to Cointelegraph, institutional interest in crypto technology, particularly tokenization, remains strong despite the volatile price movements of Bitcoin. Thomas Cowan, head of tokenization at Galaxy, shared insights at The Bridge conference in New York City, highlighting a notable shift in focus from Bitcoin's price to the broader benefits of blockchain technology. Cowan explained that there has been a discernible separation between the interest in tokenization and Bitcoin's price over recent months. Historically, as Bitcoin and other cryptocurrencies surged, traditional financial institutions expanded their crypto and tokenization teams. However, when prices fell, these teams often downsized. Cowan believes the industry is reaching a point where the advantages of blockchain technology in moving and storing traditional financial assets are recognized independently of Bitcoin's price. The growth of tokenization, where assets like oil or bonds are digitally represented on a blockchain, has accelerated over the past year. This expansion is partly attributed to the Trump administration's regulatory easing on cryptocurrency, which has sparked interest from major traditional finance companies. Despite Bitcoin's price fluctuations, which saw it peak at over $126,000 in early October before declining to around $102,000, the focus on tokenization remains steadfast. Cowan expressed optimism for the coming year, hoping the industry will effectively demonstrate to institutions that tokenization offers a superior, faster, and more cost-effective method for managing financial assets. He emphasized the importance of showcasing the clear benefits of this technology to ensure its recognition as a durable, long-term trend. Stablecoins, which have gained popularity following new U.S. regulations, represent a significant crypto use case. Cowan noted that tokenized money market funds, investing in assets like government bonds, are also attracting increasing institutional interest. As capital moves onchain, investors seek the risk-free rate they miss when holding stablecoins, making the transition from stablecoins to money market funds a logical progression. Cowan believes the industry is approaching a pivotal moment where the transformative potential of blockchain technology will be evident to major financial companies previously hesitant to engage. He urged these institutions to invest now, predicting significant developments in the next few years.