Why Tokenization Is the Next Unlock After ETFs

Summary

Markets Daily Crypto Roundup: Why Tokenization Is the Next Unlock After ETFs

Released on May 27, 2025 by CoinDesk

In this insightful episode of Markets Daily Crypto Roundup, hosted by Jen from CoinDesk, the conversation centers on the burgeoning field of tokenization and its potential to revolutionize the financial landscape following the widespread adoption of Exchange-Traded Funds (ETFs). The episode features Jono Steinberg, CEO and founder of WisdomTree, an ETF powerhouse managing $119 billion in assets globally. Alongside Andy, the discussion delves into the current state of crypto as an asset class, the intricacies of tokenizing real-world assets, and the future prospects of blockchain technology in mainstream finance.

1. Crypto as an Emerging Asset Class

The episode opens with Jen posing a critical question to Jono: "Can we call crypto an asset class yet?" [01:07]. Jono responds thoughtfully, acknowledging that while crypto isn't fully established as an asset class, significant strides have been made. He highlights Bitcoin's established status and the impact of products like WisdomTree's CoinDesk 20, which aims to mainstream crypto investments.

Notable Quote:

"It's not quite an asset class yet, but it's moving well along the way. Bitcoin is fully established for sure." — Jono Steinberg [01:17]

2. WisdomTree's Role in Tokenization

Jono elaborates on WisdomTree's initiatives in the digital assets space, emphasizing their efforts in managing Exchange-Traded Products (ETPs) worth approximately $2 billion. The company has ventured into tokenizing real-world assets, currently holding about $150 million in tokenized assets, including money market funds and gold equities.

Notable Quote:

"I'm very bullish on tokenization on the blockchain as the next wrapper of the future beyond ETFs." — Jono Steinberg [02:21]

3. Challenges in Tokenizing Real-World Assets

The conversation shifts to the challenges faced in tokenizing real-world assets. Jono points out that while ETFs have set a high bar for ease and accessibility, tokenization offers programmable exposures that could drive further innovation. However, displacing the ETF market requires overcoming significant regulatory and adoption hurdles.

Notable Quote:

"Tokenization of real-world assets is going to be a hard journey to displace the ETF, which has the least amount of friction." — Jono Steinberg [03:13]

4. Comparing ETFs and Tokenization: A Journey Ahead

Drawing parallels between the ETF and tokenization journeys, Jono reflects on the longevity and success of ETFs, which have been around for 32 years and recently surpassed mutual funds in revenue. He suggests that tokenization is still in its infancy but holds immense potential to offer more seamless and innovative financial products.

Notable Quote:

"When you think about ETFs are like 32 years old. It was only a couple of years ago that they surpassed mutual funds from a revenue standpoint." — Jono Steinberg [06:09]

5. The Future of Tokenized Assets: WisdomTree's Vision

Looking ahead, Jono shares WisdomTree's strategic initiatives, including WisdomTree Prime and WisdomTree Connect. These platforms aim to integrate traditional assets with blockchain technology, offering investors a unified and globalized financial experience. Despite the lengthy regulatory challenges, Jono remains optimistic about the long-term integration of tokenized assets into mainstream portfolios.

Notable Quote:

"We are going to make that happen within WisdomTree Prime and WisdomTree Connect." — Jono Steinberg [06:09]

6. Closing Remarks

Andy complements Jono's insights, expressing enthusiasm for WisdomTree's forward-thinking approach and the potential of tokenization to unlock new avenues in the financial markets. Jen concludes the episode by thanking Jono for his valuable contributions, underscoring the significance of the discussion for investors and industry stakeholders alike.

Notable Quote:

"Even though that's been the bread and butter of the business and where you've been a leader and now going into Connect and Prime just seemed like a next logical step." — Andy [07:15]

Conclusion

The episode effectively captures the dynamic interplay between traditional financial instruments like ETFs and the innovative frontier of tokenization. With thought leaders like Jono Steinberg at the helm, WisdomTree is poised to bridge the gap between conventional investing and the transformative potential of blockchain technology. As tokenization continues to evolve, its integration with established financial systems promises to redefine how investors access and engage with the markets of the future.

Transcript

[Ryan Reynolds]

Ryan Reynolds here from Mint Mobile. I don't know if you knew this, but anyone can get the same Premium Wireless for $15 a month plan that I've been enjoying. It's not just for celebrities. So do like I did and have one of your assistant's assistants switch you to Mint Mobile today. I'm told it's super easy to [e-mail].

[Jen]

Switch upfront payment of $45 for 3 month plan equivalent to $15 per month Required intro rate first 3 months only, then full price plan options available, taxes and fees extra. See full [e-mail] welcome to this special edition, Markets Daily from ConsenSys 2025. Our next guest is the CEO and founder of WisdomTree, an ETF powerhouse with $119 billion in assets under management globally. As Wall street meets Web3, he's helping redefine how investors access and engage with the markets of the future. Jono Steinberg, welcome to the show.

[Jono Steinberg]

Thank you for having me.

[Jen]

Thanks for being here. You were on stage this morning, weren't you?

[Jono Steinberg]

Yes, I was.

[Jen]

Your session was called can we call it an asset class yet? How serious investors can engage in crypto? My question for you, can we call it an asset class yet?

[Jono Steinberg]

It's not quite an asset class yet, but it's moving well along the way. I mean, bitcoin is fully established for sure. And I think what we've done with CoinDesk, with our Global 20 or the CoinDesk 20, those kinds of products I think will really go a long way to mainstreaming the asset class for investors.

[Andy]

I wrote that title, Jen.

[Jen]

I was going to say, Andy, weren't you there?

[Andy]

And I was also there and I have to agree, Bitcoin super established. CoinDesk 20 is going to be a great QQQ of crypto to make that rest of that distribution process easy. And you know, WisdomTree 119 billion in assets. I got to say, you accumulated that the hard way. Right. It's all wisdom tree, known for new stuff, for breaking down barriers, for giving access to new ideas, which means you need to educate and then you need to distribute. I guess. Done a great job in crypto so far. How about the tokenized products? How does that education process work and how do you think about mapping out the market?

[Jono Steinberg]

So we, so for us, digital assets is a big initiative that includes crypto. The ETPs we manage about $2 billion. We have about 15 exposures, most out of Europe, but more coming in the United States. As a part of that, we are trying to sort of tokenize real world assets. We now have about $150 million in tokenized assets, mostly in our money market fund, but also equities we've tokenized gold. So I'm very bullish on tokenization on the blockchain as the, you know, the next wrapper of the future beyond ETFs.

[Jen]

I guess, is that what serious investors should be paying attention to when it comes to digital assets? Where do you think serious investors should be looking to?

[Jono Steinberg]

You know, first of all, serious investors, there are a million ways to skin the cat. So it's. You don't really want to generalize. It depends on where they are. The. For crypto, the asset class, it's still very early days. Most institutions in my background have not really allocated their 1 to 2 or 3%. If you did this by market cap of liquid assets, crypto would get a 2% weight. Let's say that hasn't happened to most institutions. But tokenization of real world assets, it's going to be a hard journey to displace the etf, which has the least amount of friction. That said, when you think about the wrapper and you can make them programmable exposures, there's a lot of innovation that can come beyond just liquidity and convenience. And so I'm very, very bullish. But it's a journey and we're in it for the long haul. But with this effort, I was 13 years behind State street in ETFs. This time I wanted to be first through the regulatory door. It's easier to be first, but they made us work hard for it. So they did make it.

[Andy]

Yeah, they made it. They made it work hard and they made sure the finish line was at a place where everybody was at a tie, which was. Anyway, we got through that, but now I think the gates are open. So, you know, there's two things, right? Taking treasuries and tokenizing them, making them available on chain, taking crypto assets and ETF ing them, making them, I guess, ingestible right into, into portfolios. You know, that's. Those are two different sales processes. So how do you think your distribution team, how do they think?

[Jono Steinberg]

I'll tell you. What we were trying to do is, is we wanted to normalize crypto, the asset class so that it could sit next to traditional assets as well as traditional banking services like the debit card. We also wanted to take traditional assets, gold equities, treasuries, and get the seamless globalization that comes from the blockchain. And blending that experience. That's sort of what our vision for this is. And the much of my. Well there's crypto ETPs which is placed to the core business and that my team does. That's what we do. We also have something called WisdomTree prime which is a direct to consumer effort there. I'm still working through some of the regulatory hurdles to really launch it, but it's been like a four year journey. I'm close but it's, it's really an endurance test, this whole thing.

[Jen]

I mean a lot shorter than the ETF journey so far. So fully so far, right?

[Jono Steinberg]

Yes, that's true.

[Jen]

You know, speaking of journeys, you just said you anticipate it being a long journey before tokenized assets can displace ETP products or ETPs. How long does that journey look like for you? What are you preparing for?

[Jono Steinberg]

You know, when you think about, you know like ETFs are like 32 years old. It was only a couple of years ago that they surpassed mutual funds from a revenue standpoint. So this will and the ETF really satisfies investors. It's a very, very good experience. That said, you can't do peer to peer exchange of value. There will be certain things that the on chain community has that others will want. When you look at your iPhone, it's not about a phone call, it's about the pictures, it's about the Internet really. The on chain community is the cutting edge and they are going to have a better experience than traditional investors and the other investors are going to want that seamless experience like t0 settlement of all assets can't really be done on the old rails. So we're going to make that happen within Wisdom Tree prime and Wisdom Tree Connect.

[Andy]

This is fantastic, you know, to realizing the limits of the ETF wrapper. Even though that's been the bread and butter of the business and where you've been a leader and now going into Connect and Prime just seemed like a next logical step. Let's go with the regulatory approval so we can get that thing rolling. I'll be the first customer in line.

[Jono Steinberg]

Thank you.

[Jen]

Jono, thanks so much. A real pleasure for joining the show. We hope you enjoy the rest of consensus.

[Jono Steinberg]

Thank you. Thank you for having me. Bye bye.

[Jen]

That was WisdomTree CEO and founder Jono Steinberg.

[Ryan Reynolds]

You set the gold standard for your business. Your website should do the same. WIX puts you at the helm so you can enjoy the creative freedom of designing your site just the way you want. Want someone to bounce your ideas off, talk with AI to create a beautiful site together. Whatever your business, manage it from one place and tie it all together with a personalized domain name. Gear up for success with the brand that says you best you can do it yourself on wix.