If you had to reduce the past few years of crypto to a single trend, it wouldn't be "Bitcoin as reserve asset," nor "DeFi yield," nor memecoins. It would be tokenization — moving traditional assets onto the blockchain.
Token Terminal just published an overview that pulls the picture together. The numbers in it deserve a closer look — not because they're the next 1000x narrative, but because they show where we actually stand today in a structural transition.
Four asset classes, four different stages of maturity
Tokenization isn't happening at the same speed everywhere. Anyone judging the sector at large misses that each of the four major asset classes is writing its own story.
| Class | On-chain today | Addressable market | Penetration |
|---|---|---|---|
| Stablecoins | ~$304B | $100T+ (global M2) | 0.3 % |
| Tokenized funds | ~$32B | $130T+ (global AUM) | 0.02 % |
| Tokenized commodities | ~$5B | $54T+ (gold, silver, copper) | <0.01 % |
| Tokenized equities | ~$1B | $144T+ (global public equities) | 0.0008 % |
The penetration rates all look "small." But they're four orders of magnitude apart — from 0.3 % for stablecoins down to 0.0008 % for equities. This isn't "the same market at different early stages." These are four separate transitions with their own obstacles, speeds, and winners.
What each class means on its own
Stablecoins are proof that tokenization is product-ready. $304B on-chain sounds like crypto-scale, but compared to global M2 (~$100T) it's a rounding figure. Yet according to Messari, hundreds of billions of dollars in transfer volume run through them per day. Stablecoins have found product-market fit — for trading, cross-border payments, DeFi settlement. What's missing is no longer the product, but regulatory smoothing and the second adoption leap into areas like payroll and treasury management.
Tokenized funds are next. Ondo, BlackRock's BUIDL, Franklin Templeton — they wrap treasury bills, money markets, and increasingly equity strategies into tokenized shells. The leverage here isn't market size (traditional asset management already has that), it's distribution: a money market fund a crypto user can buy from their wallet in 30 seconds has different reach than a classic fund requiring a brokerage account, KYC, and banking hours.
Tokenized commodities are 90 % gold, 10 % everything else. As we showed in detail last week — see our post on tokenized commodities — the outliers (SLVon, USOon, COPXon) are small but structurally interesting. USOon moved over $100M in a single week during the Strait of Hormuz crisis in March. That's the kind of data point showing it doesn't have to stay a gold-hedge story.
Tokenized equities are the large-scale play. $144T in global equities vs. $1B on-chain. Here sits the largest long-term potential — but also the most regulatory hurdles. Equities are securities, which makes any tokenization an immediate compliance topic. Whoever solves that (Coinbase with "Exchange Everything," Ondo, a handful of others) plays in a different league in the 2030s than today.
What does this mean for market observers and backtesters?
Here it gets concrete. Three implications that touch all strategy development:
1. Market structure changes without dramatic-looking charts. The migration on-chain runs in the background. You don't see it looking at Bitcoin daily candles. You see it watching where liquidity actually emerges — and that's been shifting slowly but constantly for years.
2. Correlation assumptions go stale. A backtest strategy on SLV (the classic silver ETF) using 18 years of history implicitly assumed that the primary vehicle for silver exposure would continue to be SLV or comparable ETFs. In a world where capital increasingly flows into tokenized variants — even if small today — the underlying's liquidity character can change. Spreads, volume profiles, time-of-day effects are the first places it shows up.
3. The "24/7 market" is no longer just crypto. Stablecoins are 24/7. Tokenized funds partially are. When CME goes 24/7 for crypto futures on May 29 (see our CME post) and tokenized equities eventually follow, the clean separation "weekend market = crypto / weekday market = TradFi" disappears step by step. Day-of-week patterns in backtests tend to weaken.
4. Choice of backtest vehicle matters more. If I want to backtest silver strategies today, I have several options with different properties: silver spot (XAG, long history, classic market hours), SLV ETF (shorter history but equity liquidity), SLVon token (very short history, 24/5 trading, small market cap). Which vehicle I pick affects the result. Conscious choice becomes part of methodology.
What we take from this for our platform
Backtesting Arena currently covers four asset classes — crypto, stocks, ETFs, commodities, forex. That includes the underlying of 99 % of all tokenized products today. Which means: anyone testing a strategy on SLV, GLD, USO, AAPL, SPY is also indirectly testing the underlying of SLVon, XAUT, USOon, and upcoming tokenized equities.
What we prioritize from the tokenization wave for the coming quarters:
- Methodological clarity as a starting point. We communicate transparently which data source a backtest uses — and why. For commodities with roll-yield mechanics (USO), the disclaimer is part of correct interpretation. That's not a new feature, that's table stakes.
- Multi-source awareness in the market data architecture. As tokenized versions of classic assets become more relevant, the question "which data source do we trust for asset X?" becomes an architecture question, not just an implementation question.
- No token backtesting for show. We don't build backtest routes on SLVon, USOon, XAUT as long as the data history is too short to produce meaningful results. That's methodologically honest. Once tokens have 3+ years of history, that changes.
What this post is not saying
A few claims that often hitchhike with the tokenization discussion, deliberately not part of this:
- That tokenization makes banks, exchanges, or brokerage firms obsolete. It shifts functions, it doesn't abolish them.
- That "$100 trillion on-chain" is a binding goal. The TAM numbers show the potential, not the trajectory. Penetration could just as easily stagnate at 5 % as grow to 50 %.
- That every token is "investable." Many tokenized products aren't accessible or marketed in the EU/DACH. Reg-S exemptions, geographic restrictions, regulatory gray zones are reality.
What remains is the structural observation: four huge asset classes are slowly migrating to blockchain infrastructure. Anyone ignoring this transition isn't missing a trade — they're missing a slow structural shift that plays out over years.
Bottom line
Token Terminal's overview shows nothing new — and that's the point. The tokenization story has been running for years, quarter after quarter, without ever having a single "tokenization day." It's the most unspectacular of the major crypto stories — and possibly the most important precisely because of that.
For our platform, that means: build tools that take methodology seriously. Cover asset classes that represent the underlying of every tokenized variant. Track the transition without chasing every hype cycle. If this structural shift — as it appears — defines the next 10 years, the most valuable thing a backtest tool can offer is clarity about the tools themselves.
FAQ
Does the tokenization wave mean classic ETFs eventually disappear? No. Tokenized versions complement classic ETFs for now, they don't replace them. The typical use case of a tokenized ETF is access outside the U.S. and 24/7 tradability — properties the classic ETF doesn't offer. Both formats will likely coexist with different user groups.
Which tokenization class has the biggest near-term growth potential? Based on current data: tokenized funds. They already have a clear institutional anchor (BlackRock BUIDL, Ondo OUSG, Franklin BENJI), regulatory clarity is relatively most advanced, and the addressable market is huge. Tokenized equities have the larger long-term potential but need regulatory maturity.
How can I test strategies on underlyings that don't yet have sufficient token history? On the classic ETFs or spot data. Backtesting Arena offers GLD, SLV, USO, COPX, and over 30 other commodity/ETF symbols as dedicated asset classes for Pro- and Elite-tier users. Anyone wanting to test silver strategies uses SLV — that's the underlying SLVon mirrors near-identically, with 18 years of data history.