Blockchain investments disrupt the real estate industry: Report
Cointelegraph Research Terminal, the leading provider of premium databases and institutional quality research on blockchain and digital assets, has added a new report to its expanding library from the industry leader in tokenization.
The report, from Security Token Market and its sister company Security Token Advisors, covers the fast-growing asset-backed real estate tokenization industry. It has information about the shifts in the industry and is a must for any business or enterprise with a portfolio that includes real estate.
The tokenized real estate industry is growing rapidly in the midst of today’s market frenzy. With investors looking for a safer investment using emerging technology, the demand for blockchain-based investment opportunities backed by real values is increasing. Real estate assets account for over 40% of the pipeline for certain technology providers in the industry, making it probably the largest and most “urgent” sector when it comes to future security token offerings.
Download the full reportcomplete with charts and infographics, from Cointelegraph Research Terminal
To understand what the 2022 landscape looks like, the report sheds light on remarkable developments and agreements. This tokenization sector gives investors access to high-performance fractional investments that can be bought with cryptocurrency and traded via secondary markets.
Emerging technology, disrupts a traditional market
The existing tokenized real estate market can be divided into the following tranches: assets that are securitized on the blockchain, assets that are fully tokenized but not actively traded on secondary markets and assets that are fully tokenized and 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 comes as no surprise, as real estate often involves extensive planning requirements, cost constraints, property management, security requirements and legal proficiency. These variables can cost an investor months and years in time, along with expenses such as unavoidable fees, depending on the size and scope of the project. Since the last Cointelegraph Research report, real estate still accounts for 89% of the pie in the total securities market; but the overall cake has grown. The number of commercial real estate agreements increased from 2% a few months ago to 3% of the total number of security symbols invested in.
The tokenisation of assets as real estate makes it possible for these historically illiquid investments to realize additional liquidity. By trading fractional parts of a property, investors can enjoy the returns generated by renting and operating without the legal and time-consuming problems associated with paper-based real estate investment and management.
Market value
Both residential and commercial real estate continue to increase in the form of capitalization over time. In June 2021, it was a modest value of $ 65 million, but in May 2022, it had $ 194 million in total monthly market value. The total market value of all security tokens is over $ 16.4 billion, of which real estate is currently around 1.2%. This may seem small now, but it is the largest growing security token sector and should be closely monitored.
Authors of research reports
Security Token Market has been conducting extensive investigations for over four years. This coverage can be used to inform issuers, investors and trading companies at several stages in the tokenization process.
Peter Gaffney is head of research at Security Token Advisors, a full-suite consulting firm that simplifies client tokenization on behalf of clients, where he develops the security token ecosystem that helps connect organizations and services.
Aneesh Shinkre works in the computer science team at Security Token Market, where he statistically analyzes, visualizes and tells the market performance of tokenized assets, while ensuring consistency in computer systems to deliver in-depth research.
Thor Wahlestedt also works in the computer science team at Security Token Market. Wahlestedt manages Security Token Markets’ data resources and infrastructure while covering the security token ecosystem via analyst reports and market summaries.
This article is for informational purposes only and does not represent an investment advice or an investment analysis or an invitation to buy or sell financial instruments. Specifically, the document does not serve as a substitute for individual investments or other advice.
