Cointelegraph Research Terminal, a leading provider of premium databases and institutional research on blockchain and digital assets, has added a new report to its expanding library of the leading tokenization company.
The report, from Security Token Market and sister company Security Token Advisors, covers the rapidly emerging asset-backed real estate token industry. It contains information on evolving shifts in the industry and is a must for any company or business with a portfolio that includes real estate.
The tokenized real estate industry is growing rapidly amidst the current market frenzy. As investors search for a safer investment using emerging technology, the demand for blockchain-based investment opportunities backed by real assets is increasing. Real estate assets account for over 40% of the pipeline for some technology providers in the industry, making it probably the largest and most “compelling” sector when it comes to security token offerings in the future.
Download the full report, complete with charts and graphs, from the Cointelegraph Research Terminal
To understand what the 2022 landscape will look like, the report highlights notable developments and deals. This tokenization segment provides investors with access to high-performance fragmented investments that can be purchased with cryptocurrency and traded across secondary markets.
Emerging technology disrupting the traditional market
The current tokenized real estate market can be divided into the following segments: assets that have been securitized on the blockchain, assets that are fully tokenized but not actively traded on secondary markets and fully tokenized assets that are actively traded on secondary markets.
Historically, real estate has been one of the most illiquid asset classes, perhaps alongside hedge funds and private equity. This is not surprising, as real estate often includes extensive planning requirements, cost constraints, property management, safety requirements, and legal ingenuity. These variables can cost the investor months and years in time, along with expenses such as unavoidable fees, depending on the scale and scale of the project. Since the last Cointelegraph Research report, real estate still makes up 89% of the pie in the total stock market; However, the overall pie has grown. The number of commercial real estate transactions has grown from 2% a few months ago to 3% of the total number of security tokens being invested in.
Marking up assets such as real estate allows these historically illiquid investments to generate additional liquidity. By trading fragmented portions of the property, investors can enjoy the return on rental and operations without the legal and time-consuming hassles associated with paper-based real estate investing and managing.
Both residential and commercial properties continue to increase in terms of capitalization over time. In June 2021, there was a modest capital of $65 million, but in May 2022 the total monthly market capitalization was $194 million. The total market capitalization of all security tokens is over $16.4 billion, of which about 1.2% is currently real estate. This may seem small now, but it is the largest growing sector of security tokens and should be closely monitored.
Research report authors
The security token market has conducted extensive research for more than four years. This coverage can be used to inform issuers, investors and trading companies at various stages of the coding process.
Peter Gaffney is Head of Research at Security Token Advisors, a full-fledged consulting firm that facilitates asset tokenization on behalf of clients, as it develops the security token ecosystem that helps connect organizations and services.
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Aneesh Shinkre works on the Data Science team at Security Token Market, where he statistically analyzes, visualizes and tells the market performance of token assets while ensuring consistency of data systems to deliver in-depth research.
Thor Wahlestedt also works on the Data Science team at Security Token Market. Wahlestedt manages the Security Token Market’s data assets and infrastructure while covering the security token ecosystem via analyst reports and market summaries.
This article is for information purposes only and does not constitute investment advice, investment analysis or a solicitation to buy or sell financial instruments. Specifically, the document does not serve as a substitute for individual investment or other advice.