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 real-world asset (RWA) tokenization, according to a <a target="_blank" href="https://experts.bitwiseinvestments.com/cio-memos/ethereum-the-comeback-kid-of-2025″>letter shared with investors by Bitwise Senior Investment Strategist Juan León.
The paper highlighted that the cryptocurrency market was marked by two narratives this year: the new all-time high for bitcoin (btc), driven by the approval of spot exchange-traded funds (ETFs) in the US, and the meteoric popularity of Solana (SOL) as retail investors. Piled into memecoin speculation.
As a result, ethereum's 66% year-to-date performance paled in comparison to btc's 130% gain and SOL's 106% rally.
ETFs that signal changes
However, recent signs suggest a change in attitude. Over the past 10 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, <a target="_blank" href="https://farside.co.uk/ethereum-etf-flow-all-data/”>data Farside Investors noted that US-traded ethereum spot ETFs saw inflows of $428.5 million, a new daily record driven by $292.7 million directed to BlackRock's ETHA.
Furthermore, ethereum ETFs recorded sub-triple-digit daily inflows in only 3 of the previous 10 trading days.
This rise indicates that institutional and retail investors are flocking to ethereum again.
RWA growth
Tokenization of real-world assets could be the fuel for ethereum's resurgence. This process involves digitizing traditional assets, such as Treasury bills, real estate and commodities, into blockchain-based tokens, offering faster, cheaper and more efficient transactions and settlements.
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 capitalization of $544 million.
According to the letter, real-world assets are valued at approximately $100 trillion globally, creating an astonishing opportunity. While it could be decades before significant portions of this market come over to blockchain rails, Leon sees immense upside potential.
Considering ethereum holds 81% of the RWA market, Leon estimates that fees generated by RWA-linked activity on ethereum could ultimately exceed $100 billion annually, more than 40 times the $2.4 billion. million dollars in network fees so far this year.
The letter attributes ethereum's dominance to its status as the most trusted and decentralized smart contract platform, ensured by its long history of supporting decentralized applications and its vast network of distributed validators.
As the world's largest asset managers explore tokenized assets, ethereum remains the “battle-tested” standard. Additionally, regulatory tailwinds could accelerate this transformation, setting ethereum up for potentially explosive growth.
The letter noted that an increasingly pro-crypto US Securities and Exchange Commission (SEC) can provide much-needed clarity, removing barriers to adoption and institutional participation.
