Tokenization’s Real Value Isn’t What You Think
Everyone’s celebrating 24/7 liquidity as the breakthrough benefit of tokenizing real-world assets. And yes, in a world where markets and news cycles never sleep, continuous trading access matters. But if you’re a retail investor cheering loudly right now, history suggests you should be careful what you wish for.
We’ve seen this movie before
I was working at Wellington Management Company when pre-market equity trading first emerged. The pitch was the same: more access, more flexibility, the ability to react in realtime for the individual investor. What actually happened? Professional trading desks with better information, faster systems, and deeper pockets systematically took advantage of the thin, early-hours markets. Retail traders paid the price.
Tokenized assets trading 24/7 will follow the same pattern in the early days. Limited liquidity plus institutional sophistication is a well-worn formula that ends badly for retail. This isn’t a reason to oppose tokenization. But let’s be honest about who benefits first; its the professional desks.
So why am I still excited about tokenization after 8 years in the digital assets industry?
The real value is self-custodied collateral
The genuinely transformative use case for tokenized assets isn’t when you can trade them; it’s what you can do with them when you’re not trading.
The world runs on leverage. Always has. Leverage allows professional risk managers to beat their peers and gather more assets. Leverage allows young families to purchase a home. Leverage exacerbates anything. And leverage requires collateral. Right now, posting collateral is slow, expensive, and limited to a narrow set of recognized assets. Tokenization changes that. Any asset (a slice of real estate, a private credit position, a commodities contract) can become collateral that moves instantly, programmatically, across any lending relationship. This is especially true of natively digital assets that already have liquidity (BTC, ETH, SOL, stables), or those that are less liquid but have trusted oracles for pricing.
Traditional lending, structured finance, volatile-market margin facilities, cross-border financing structures, etc. All of these become fundamentally more efficient when the collateral underlying them is tokenized. And beyond what we can model today, the use cases for programmable collateral that haven’t been invented yet are arguably the bigger opportunity. This is what keeps me going.
To Self-Custody, or Not To Self-Custody. That is the Question
Running alongside all of this is a debate that won’t be settled quickly: self-custody versus regulated, insured institutional custody.
Both have merit. Self-custody gives individuals and organizations direct control of their assets and adheres to the early cypherpunk worldview; no intermediary, no counterparty risk, no permission required. Institutional custody offers insurance, compliance infrastructure, and recourse when things go wrong. The right answer isn’t one or the other; it’s having the genuine ability to choose.
As the technology matures, that choice will become more accessible. We’ll see more individuals, companies, and autonomous agents holding tokenized assets directly. The friction that currently pushes most people toward custodied solutions will fall. When it does, the implications for how assets are held, moved, and used as collateral will be significant.
The bottom line
Tokenization is a real structural shift. The technology is in place, the regulations are catching up. But the benefits being marketed most loudly today are the least interesting ones. The durable value is in what happens when every asset can serve as programmable collateral, and when custody of those assets is genuinely a choice, not a constraint.
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