RWA tokens take a beating, but underlying projects show surprising strength in a volatile market.
It’s hard to deny it. The last few weeks have been a trying time for many crypto investors.
Besides a few standouts, practically all major altcoins have been on a down-trend since March. Indeed, the average altcoin has lost a quarter of its value in the last 30 days alone, whereas many are down more than 50% from their 2024 high.
Driven by a spate of negative events, the crypto market is in a state of decline, while many stock indices and commodities are approaching their all-time highs.
TL;DR…
- Altcoins Slump: Most major altcoins have tanked since March, with some down over 50% in the last month alone.
- RWA Hit Hard: Real-World Asset (RWA) projects like Ondo and Centrifuge aren't immune, seeing drops of 35-50% recently.
- Bad News Piling Up: The market's been hammered by stuff like the Mpox emergency, the U.S. dumping seized BTC, and Warren Buffet offloading stocks.
- RWA Projects Still Growing: Despite the price dip, many RWA projects are actually growing in total value locked (TVL) over the last 30 days.
- RWA Future Looks Bright: The RWA sector is still gaining traction, with big financial players showing interest, though it’s unclear if they’ll launch native tokens.
The RWA sector didn’t buck this trend — with major players like Ondo, Centrifuge and AllianceBlock Nexera recording -36.2%, -35.8% and -49.7% respectively in the last 30 days.
Here, we dive deeper into the current state of the market and look at where things are heading for the RWA space.
What’s Happening in the Market?
Times are tough out there in crypto.Frequently described as a “choppy” market, many cryptocurrencies (Bitcoin included) have been oscillating within a relatively wide range in recent weeks, albeit with a bearish skew.
The reasons for this are multiple.
Back-to-back bad news in recent weeks has sucked liquidity out of the market and made it difficult for projects to catch any momentum.
Find out why liquidity is important in crypto markets here.
In the last 7 days alone, we’ve had the World Health Organization declare Mpox (previously Monkeypox) a global health emergency, the U.S. government seemingly offloading $600 million in BTC seized from Silk Road and news that Warren Buffet’s Berkshire Hathaway was unloading stocks like the world is about to end.This has taken a negative toll on trader morale — despite positive consumer price index (CPI) figures and jobless claims data in the U.S, in addition to a reduced risk for recession (per Polymarket odds).
The crypto fear & greed index currently sits at 29, one of the lowest figures this year, indicating a market still reeling from adverse conditions.
RWA Companies Still Going Strong
Although the price action doesn’t reflect it, many RWA projects are growing well in other key metrics. Most notably, their total value locked (TVL).
As per data from DeFiLlama, most RWA projects in the top 20 by TVL have seen significant growth in the past 30 days. Every project between rank 10 and 20 has seen TVL growth over this timeframe.
Back in June, Tether, the issuer of the USDT stablecoin and one of the most profitable businesses in the world, made its first foray into the RWA space with the launch of Alloy — a gold-backed stablecoin.
Despite Alloy being still relatively unknown, Tether is now by far the largest company to launch an RWA project, but it may be joined by other industry heavyweights soon.
One such company is Ripple, the firm behind the RippleNet blockchain-based payment infrastructure and XRP cryptocurrency. In June, Ripple joined forces with Archax to bring real-world asset tokenization to the XRP ledger (XRPL).
Given that Ripple is a compliance-first company, it will likely be some time before the first tokenized real-world assets are minted on XRPL.
Learn more about Ripple’s hard-fought battle with the SEC.
That said, many pre-existing projects have also begun to pivot to the RWA niche and older previously thought defunct projects in the RWA sector have resumed building. These are usually signs that a sector is reaching saturation.
Given the dramatic benefits of bringing real-world assets on chain (neatly highlighted here) and seeming interest from major financial institutions, it appears likely that the RWA niche will continue to grow.
It remains unclear whether the blockchain-enabled platforms and protocols that deliver RWAs to the masses will offer a native token, or opt to remain tokenless like Anzen Finance, OpenEden and the like.
As always, the projects with true utility, growing demand and the right product-market fit will likely count among those that bounce back stronger during the good times.
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