Institutional Interest in Tokenization Grows Despite Bitcoin Price Volatility

According to Galaxy’s Thomas Cowan, the appeal of tokenization has begun to stand on its own, independent of the broader crypto market’s fluctuations. This comes as institutional enthusiasm for blockchain tech appears firm, even as Bitcoin’s price experiences sharp ups and downs. 

Cowan noted on Wednesday that in recent months, there has been a “separation of the interest in tokenization from the price of Bitcoin.” In previous market cycles, traditional financial institutions expanded their crypto teams when prices surged, only to scale back when the market cooled. Now, however, the trend seems to be shifting.

“People are starting to see the benefits that blockchain can offer in moving and storing traditional financial assets,” Cowan said. It’s becoming clear that this technology can improve efficiency across the financial system, he further added.

Tokenization Gains Ground as Institutions Look Beyond Bitcoin

Tokenization has seen significant momentum over the past year. Looser regulatory policies under the Trump administration have fueled this growth, drawing attention from major banks and asset managers looking to modernize their operations.

Bitcoin’s price has swung widely this year, reaching over $126,000 in October before falling nearly 20%. However, the focus among institutions appears to have shifted toward long-term innovation rather than short-term speculation.

Cowan emphasized that the next step for the crypto industry is to clearly demonstrate the tangible advantages of tokenization. “We need to show that this is simply a better, faster, and cheaper way for organizations to move and store assets,” he explained. “If large institutions can see that, they’ll recognize it as a durable, long-term trend.”

Stablecoins and Money Market Funds

Another area attracting institutional attention is the rise of stablecoins: cryptocurrencies pegged to fiat currencies. Following new U.S. regulations earlier this year, stablecoins have become one of the most active sectors in crypto.

Cowan also pointed to the growing popularity of tokenized money market funds, which invest in safe assets like government bonds. “As capital moves on-chain, investors want the same risk-free yield they get from traditional instruments,” he said. “Moving from stablecoins to money market funds is the logical next step.”

Cowan believes the industry is approaching a turning point, where blockchain’s advantages will be undeniable to traditional finance. “This is the time to invest,” he said confidently. “In the next few years, we’ll see it really take off.”