Tokens based on real-world assets are the next evolution of ETFs, says CoinFund president.

Tokenized Assets Could Open Investment Doors for Retail Investors

Christopher Perkins, president of investment firm Coinfund, suggests that real-world asset (RWA) tokens could broaden investment access for everyday retail investors, much like the rise of Exchange-Traded Funds (ETFs) did in 1993. Perkins described these tokens as akin to a new kind of ETF, which allows for the trading of RWAs 24/7 in markets accessible worldwide.

He noted that RWAs can help level the playing field by reducing the information gap that generally excludes individual investors from participating in private placements due to current accreditation rules. “I think,” he said, “normal people don’t have access to the private market. They are inherently personal, and statistics show that around 81% of companies in the U.S. generating $100 million in revenue are private.”

This reality, he pointed out, significantly limits the opportunities for average individuals to engage with some of the more innovative companies out there.

There are promising applications for tokenized RWAs in blockchain technology—potentially speeding up capital access, facilitating equity funding via fractionated ownership, creating new types of collateral for decentralized finance (DeFi) applications, and even reshaping capital formation structures altogether.

Declining Public Investment Opportunities

Perkins expressed concerns regarding the current state of public markets, describing them as “completely broken.” He remarked that the number of publicly traded companies has plummeted by roughly 50% since the 1990s. “We’re raising less money in the public domain, which, frankly, makes zero sense,” he added.

In the wake of this, brokerage platform Robinhood has recently launched tokenized stock trading for its European users. As part of this initiative, they’re offering select customers “private equity” tokens for companies like OpenAI and SpaceX.

These tokens allow retail investors some price exposure to the underlying private companies, but it’s crucial to note that they don’t confer ownership or voting rights. In fact, OpenAI issued a warning to potential token holders, clarifying that these tokens do not represent the company’s stock and that they had no approval for such an offering.