Investing.com – The price of cryptocurrencies and other cryptocurrencies has risen sharply in recent weeks on the back of declining Fed rate hike expectations and the banking crisis, although BTC struggled to hold above $30,000 on Monday Morning.
Thus, investors are wondering what will be the next catalysts that will allow a possible continuation of the rise of Bitcoin.
In a Friday report cited by Coindesk, Bank of America (NYSE:) touched on the topic by referring to a “key driver of digital asset adoption” that topped $1 billion in value last month, the market of tokenized.
Recall that tokenization is the process of putting ownership of tangible assets, such as precious metals, on the blockchain, which allows these assets to be bought and sold 24 hours a day, 7 days a week without intermediate.
However, the Bank of America considers the tokenization of real assets, such as commodities, currencies and stocks, as a “critical driver for the adoption of digital assets”.
The bank explained that before the advent of tokenized gold, investors seeking exposure to the gold market could buy exchange-traded funds (ETFs) and futures, or those looking to exposure to physical gold could buy it through brokers. However, she pointed out that “these investment vehicles have disadvantages related to cost and/or liquidity”.
“Tokenized gold offers exposure to physical gold, 24/7 real-time settlement, no management fees, storage or insurance costs. The low minimum investment increases the accessibility and “fractionalization allows the transfer of ownership and value of physical gold, which was not possible before,” summarized Bank of America.
BofA analysts believe that tokenization of the precious metal could increase liquidity and allow investors to rebalance their portfolios quickly and efficiently, and that tokenization of the gold supply chain could benefit ESG-focused investors who need traceability.