Fortunafi's Real World Insights
Posts
November 2024: Real World Assets (RWA) & Stablecoin Recap

November 2024: Real World Assets (RWA) & Stablecoin Recap

A broader cryptoasset rally brought forth all-time highs for BTC and the likes of various other digital assets - with various RWA & stablecoin metrics no exception. So is anyone really surprised that, amongst all else, RWA TVL and the total stablecoin market cap hit an all-time high?!

December 05, 2024

Crypto Overview: What Happened Last Month?

November brought forth one of crypto's biggest months in years: jaw-dropping regulatory shifts, institutional milestones, mounting global adoption of BTC as a strategic reserve asset, etc. While the month began with measured optimism, several high-profile developments catalyzed bullish market sentiment, propelling BTC to surpass a $1.7T market capitalization and become the eighth-largest asset globally. These achievements were further reinforced by the news of BlackRock's BTC ETF eclipsing its gold ETF in net assets—just months after its debut—thereby cementing BTC's evolving role in both institutional and retail portfolios.

One of the month's defining narratives was unprecedented political support for BTC and crypto. Most notably, former President Donald Trump hinted at pro-crypto legal reforms and expressed openness to strategic crypto adoption. Legislative momentum was also bolstered by Pennsylvania's passing of the "Bitcoin Rights Bill" and the proposal of a BTC strategic reserve, with Brazil following suit and also proposing a strategic reserve. The crypto-friendly climate was further supported by the announced departure of SEC Chair Gary Gensler and speculation about key crypto advocates like Kelly Loeffler and Scott Bessent assuming influential government roles in the Trump administration. Together, these shifts signaled a potential regulatory sea change, easing investor concerns and encouraging further institutional participation.

Fig. 1: Nov. 2024 Returns - Top 10 Cryptoassets by Market Capitalization

Adding fuel to the rally, MicroStrategy led the charge with a monumental $5.4B BTC purchase, joined by announcements from entities such as Rumble, British pension funds, and even municipal governments like Vancouver, all moved to embrace BTX as a balance sheet asset. Several companies across diverse sectors, including LQR House, a specialized e-commerce platform, Remixpoint, which operates in the energy and automotive sectors, and Genius Group, an AI-powered education group, have strategically increased their BTC investments, collectively committing millions to expand their cryptocurrency holdings as part of their business strategies. As these developments unfolded, November also marked the debut of BTC ETF options, offering new avenues for hedging and exposure. These events solidified the narrative that the BTC adoption curve is steepening, with corporations and governments recognizing its strategic value and thus driving the broader cryptoasset market meaningful higher in November. When all was said and done, XRP (+281%), ADA (+215%), and DOGE (+161%) were the top three performers of the top 10 cryptoassets by market cap.

In a month of milestones, November demonstrated that BTC and the broader cryptoasset industry are at an inflection point. Institutional confidence, regulatory optimism, and mounting adoption indicate that while challenges remain, the foundations for a robust crypto economy are stronger than ever. With this backdrop, we now turn to the Real World Assets (RWA) and stablecoin sectors, which continue to showcase unparalleled innovation and adoption, playing a pivotal role in crypto's march toward mainstream acceptance.

RWA: Nov. 2024 Milestones & Developments

Fig. 2: Real World Assets Total Value Locked (TVL)

After spending the bulk of 2Q drifting modestly lower, RWA TVL surged to a new all-time high of $8.4B, thereby posting a remarkable +25% increase month-over-month and arguably marking the start of the next RWA adoption wave. Should the trend persist, RWA TVL could surpass $10B by the end of the year.

Fig. 3: RWA TVL by Category

After posting single-digit gains for back-to-back months, the Synthetic Dollar vertical notched a whopping +60% increase in TVL, surging to $1.62B and further cementing itself as the biggest RWA category at $4.4B - or approximately 52% of all RWA TVL. Besides the Synthetic Dollar category, the only other category that saw a positive change month-over-month was Equities with a menial +$1.5M increase - albeit up a +16% from October 2024.

Fig. 4: RWA TVL Change by Blockchain

Ethereum ended November as the best-performing chain for yet another month in a row when looking at the month-over-month change in TVL. Ethereum added an astonishing +$1.7B in RWA-related TVL, up from $288M in October and marking the best-performing month since May 2024. In comparison, Polygon, Avalanche, and Arbitrum scored a +$34M, +$30M, and +$16M increase in RWA TVL.

Fig. 5: RWA-to-DeFi TVL Ratio

Notwithstanding RWA TVL going vertical and hitting a new all-time high, our RWA-to-DeFi TVL Ratio, which compares RWA TVL relative to DeFi TVL to get a better sense of how the RWA vertical is trending relative to the entire DeFi ecosystem, ended November lower for a fourth consecutive month. The drop from 0.044x to 0.036x indicates that while RWA TVL soared in November, DeFi TVL outpaced RWA’s TVL expansion. That is, RWA TVL grew by +$1.64B while DeFi TVL advanced an incredible +$40B to $127.4B.

Fig. 6: Number of RWA Token Holders

The number of RWA token holders across a select number of RWA-centric tokens, or what we believe to be a proxy for the broader RWA vertical, gained +1.4% last month to roughly 562,300 - well below September’s +2.5% increase, or what remains the largest monthly increase since May 2024. Although RWA token holder growth has yet to reach escape velocity like RWA TVL did in November, the case could be made that the number of holders is set to follow suit in the months ahead.

Fig. 7: Nov. 2024 Performance

BTC wasn’t the only one to post one of its best months in years, but the same could be said for the vast majority of altcoins - with the most speculative and/or nascent verticals posting the best performance. Such can be seen when looking at Figure 7, which shows that our RWA Index (+80%) outperformed the DeFi Pulse’s Index (+62%), as well as ETH (+48%) and BTC (+37%). Between the aforementioned RWA developments and the fact that the RWA vertical is nascent relative to DeFi, it ought to come as no surprise that our RWA Index was the month’s best performer.

Notable RWA Developments:

CFTC Endorses Tokenizing Trading Collateral: The CFTC endorsed the tokenization of trading collateral, highlighting its potential to make financial transactions more secure and efficient.
Tether's RWA Tokenization Platform: Tether rolled out a platform to tokenize RWA, bringing physical assets onto the blockchain as part of a broader effort to improve efficiency and transparency in managing traditional assets.
Fireblocks and NongHyup Bank's VAT Tokenization: Fireblocks and NongHyup Bank announced that they’re teaming up to tokenize VAT claims, aiming to simplify tax processes and increase operational efficiency.
BlackRock's BUIDL Goes Multichain: BlackRock expanded its blockchain-based investment product, BUIDL, to operate across multiple networks, including Solana, Optimism, and Polygon.
Libeara and Fund Bridge Launch Tokenized Money Fund on Avalanche: Libeara and Fund Bridge launched a tokenized money market fund on Avalanche, offering investors a more efficient way to engage with financial products.
SWIFT, UBS, and Chainlink's Tokenized Fund Settlement Pilot: SWIFT, UBS, and Chainlink announced that they’re piloting a system to settle tokenized funds more efficiently using blockchain technology. If successful, the project could transform the way cross-border transactions are processed amongst legacy financial institutions.
Monetary Authority of Singapore's Asset Tokenization Framework: The Monetary Authority of Singapore established a framework to accelerate the commercialization of asset tokenization in a bid to position Singapore as a leader in merging traditional finance with blockchain technology.
UBS Launches Tokenized Fund on Ethereum: UBS announced the creation of its UBS USD Money Market Investment Fund Token (“uMINT”), a Money Market investment built on Ethereum. Thomas Kaegi, Co-Head of UBS Asset Management APAC, said, “We have seen growing investor appetite for tokenized financial assets across asset classes. Through leveraging our global capabilities and collaborating with peers and regulators, we can now provide clients with an innovative solution.”
El Salvador's First Tokenized Treasury Bill: NexBridge Digital Financial Solutions S.A. de C.V., a digital asset issuer based in El Salvador, secured a digital asset service license from local regulators - making it the first tokenized treasury bill in El Salvador. The company has partnered with Bitfinex Securities to launch the country's first regulated public offering of tokenized T-Bills.
Citi and Fidelity's On-Chain Forex Swap Proof of Concept: Citi and Fidelity announced that they’ve developed a proof-of-concept for an on-chain money-market fund that includes a digital foreign exchange swap, promising greater efficiency and transparency in forex markets. The solution will be showcased at the Singapore FinTech Festival 2024.
Goldman Sachs Plans Industry-Owned Tokenization Platform: Goldman Sachs disclosed that it is spinning off its tokenization platform into an industry-owned entity to ultimately become an industry-owned distributed technology solution upon approval by regulators.
SushiSwap's Dojo Agent and Tweet Tokens for Memecoins: SushiSwap’s Dojo Agent rolled out a new feature to lets users tokenize tweets and create memecoins directly from Twitter - merging together two of crypto’s most widely followed sectors, memecoins and RWA.
CFTC Advisory Subcommittee Recommends Tokenized Collateral: A CFTC advisory group has proposed adopting tokenized collateral without requiring regulatory changes, easing blockchain integration into existing financial systems.
Institutional Interest in Tokenized Products Grows, PwC Survey Reveals: PwC survey revealed growing institutional enthusiasm for tokenized products as businesses recognize the benefits of blockchain in increasing efficiency and liquidity.

Stablecoins: Nov. 2024 Milestones & Developments

Fig. 8: Stablecoin Total Market Capitalization

Amid unparalleled crypto demand not seen since 2021, the total stablecoin market cap surged nearly +12% to an all-time high of $193.4B and secured a 13th consecutive month of gains. Just as we saw in October, November’s steep rise can be attributed to broader crypto market adoption, the launch of various stablecoin protocols, and the global adoption of stablecoins as a go-to means for exchanging and transferring value. Assuming the aforementioned tailwinds persist, the case could be made that the total stablecoin market cap will eclipse $200B before the end of the year.

Fig. 9: Top Stablecoin Market Capitalizations

When looking at the top 8 stablecoins by market cap, which comprise ~95% of the entire stablecoin market, November brought forth a few notable changes month-over-month. Most notably, Tether's USDT added more than $13.6B in market cap, resulting in the stablecoin behemoth making up nearly 70% of the total stablecoin market and explaining +65% of the increase in total stablecoin market cap for November. Last month, Maker rebranded to "Sky" and introduced new versions of its DAI stablecoin, also known as USDS. USDS launch last month instantly catapulted the stablecoin to 3rd place with a $5.2B market cap, while DAI slipped below Ethena's USDe and positioned itself as the 5th largest stablecoin. Aside from First Digital's FDUSD stablecoin also shedding nearly $500M in market cap, there were a few additional month-over-month changes worthy of mention.

Fig. 10: Change in Stablecoin Supply by Chain

To better understand where November’s stablecoin growth took place, we can look at the change in stablecoin supplies on a chain-by-chain basis. Unlike last month, where Ethereum saw only a $1.9B net issuance of stablecoins and Tron, BSC, and Ton trailed somewhat close behind, Ethereum blew out November with a net issuance of $20.3B worth of stablecoins. Trailing well behind, though also outperforming the vast majority of other blockchains, was Solana ($868) and BSC ($633M. In aggregate, there was nearly $2.8B of stablecoin net redemptions across Near, Base, Avalanche, Polygon, and Tron.

Fig. 11: Total Stablecoin Transaction Volume by Chain

To better understand last month’s stablecoin activity, we can look at the total stablecoin transaction volume by chain and stablecoin transaction size by chain. While Ethereum saw the most significant increase in stablecoin issuances last month, Tron saw notably more transaction activity than Ethereum, with close to $315B worth of value exchange relative to Ethereum’s $247B. Despite coming in second place, Ethereum’s transaction volume in November put it well ahead of the rest of the pack - with BSC (+$39B), Solana (+$35B), and Arbitrum (+$26B) making up third, fourth, and fifth place. Digging one layer deeper, we’ll find that although Tron saw the most transaction volume on a dollar basis, Solana saw the most stablecoin transactions at 4.25B - indicating somewhat greater capital efficiency than its peers. Similarly, Tron and BSC saw considerable stablecoin activity, with 2.16B and 1.79B total transactions, respectively. Accordingly, the case could be made that the chains that saw the greatest demand and utility for November were unequivocally Ethereum Solana, Tron, and BSC.

Fig. 12: Stablecoin Transaction Size By Blockchain, By Amount

Notable Stablecoin Developments:

Standard Chartered and Zodia Markets on Stablecoins: Standard Chartered (STAN) and Zodia Markets published a report noting that the stablecoins could grow to 10% of the U.S. money supply amid favorable U.S. regulation of stablecoins and continued growth of cross-border payments and FX-equivalent transactions.
Robinhood, Kraken, and Paxos Stablecoin Network: Robinhood, Kraken, and Paxos launched Global Dollar Network, a stablecoin protocol powered by its newest USDG stablecoin, which was launched by Paxos that complies with the Monetary Authority of Singapore’s upcoming stablecoin regulations.
Tether Launches Dirham Stablecoin on TON: Tether unveiled a stablecoin tied to the UAE dirham on the TON blockchain, targeting Middle Eastern demand and diversifying beyond its traditional USD offerings.
Stablecoin Trading Volume Hits $1.8 Trillion: A November surge in stablecoin demand and trading drove monthly exchange stablecoin trading volume to $1.8T - marking one of the highest monthly volumes in 2024.
UK Eyes Crypto Regulation by 2026: New brokes that the UK aims to regulate its crypto sector by 2026, with the FCA focusing on balancing innovation with stringent consumer protections.
Schuman Financial Launches Euro-Backed Stablecoin: Schuman Financial debuted a euro-backed stablecoin aligned with MiCA regulations, catering to European demand for compliant digital assets.
Cantor Fitzgerald Acquires Stake in Tether: Traditional financial giant Cantor Fitzgerald acquired a 5% stake in Tether, highlighting institutional interest in stablecoin ventures.
Paxos Expands to EU with Membrane Finance Acquisition: Paxos acquired Membrane Finance, leveraging the company’s e-money license to strengthen euro-based stablecoin offerings under MiCA.
Quantoz Launches MiCA-Compliant Stablecoins: Quantoz released EURQ and USDQ stablecoins that are compliant with EU’s MiCA regulations, offering regionally backed, fully regulated digital assets.
Curve Finance Introduces CRV USD Stablecoin: Curve launched CRV USD, a yield-bearing stablecoin that provides crypto users with secure, decentralized savings options.
PayPal Expands Stablecoin Transfers Across Networks: PayPal integrated LayerZero technology to facilitate seamless stablecoin transfers between Ethereum and Solana, streamlining interoperability for PYUSD users.

How To Reach Us

Did you enjoy this post and are interested in leaving feedback? Please participate in a brief survey and let us know what you think!

Have questions or want to learn more? Feel free to contact us at [email protected] and/or visit us at Fortunafi.com.

Be sure to follow us on Twitter and subscribe to our Real World Insights newsletter to stay updated with the latest Fortunafi developments and releases!‎‎‎‎‎

Sources

Disclaimer: The information contained herein is general information, intended for educational purposes only, and is not intended to constitute legal, tax, accounting, or investment advice. Information, opinions, and views are solely of Fortunafi, and none of the information contained should be used as the basis for any investment decisions. To ensure suitability, contact a licensed investment professional when making any investment decisions and do your own research.