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Supply is growing. Demand isn’t following. That’s basically the core problem eating at tokenized asset markets right now, and it came through loud and clear at a recent event in Singapore.
Why It Matters
The growing supply of tokenized real-world assets amidst a lack of corresponding demand highlights a significant challenge within the market, potentially stalling innovation and adoption in this sector. This imbalance may deter new entrants and investors, leading to liquidity issues and reduced market confidence, which could ultimately hinder the broader integration of blockchain technology into traditional asset classes. As the tokenized asset market matures, addressing the disconnect between supply and demand will be crucial for its viability and future growth.
Alex Taaffe from GSR put it plainly: more tokenized assets exist than ever — pre-IPO stocks, commodities, a widening range of real-world instruments — but investor appetite hasn’t kept pace. The product shelf is getting longer. The buyers aren’t showing up in proportion. And that gap is creating a liquidity crunch that nobody has a clean fix for yet.
Not yet, anyway.
Fragmented Pools, Fragmented Markets
Lingling Jiang of DWF Labs drilled into one structural reason why liquidity stays thin: when multiple issuers tokenize the same underlying asset, each tends to spin up its own separate liquidity pool. So instead of one deep pool for, say, a tokenized commodity, you end up with five shallow ones. It’s pretty much the worst outcome for anyone trying to trade size. Jiang flagged that cryptocurrency liquidity more broadly has improved over recent years, but the tokenized real-world asset corner of the market stays fragmented in ways that are hard to fix without some kind of standardization push — and that’s unclear when or whether it arrives.
The fragmentation problem isn’t just annoying. It raises real questions about whether tokenized assets can ever function as a genuine alternative to traditional markets if the liquidity profile stays this choppy.
Stablecoins Still Can’t Replace Your Wallet
The Singapore event also spent serious time on stablecoins, and the picture there is complicated too. Mike Silagadze of ether.fi made the point that stablecoins need to get woven into everyday financial life — not just sit in wallets as a speculative or yield instrument. He used Singapore itself as the example: people there hold stablecoins but still need local currency to pay for coffee, rent, a taxi. The rails aren’t connected yet.
Yvonne Chia from USDD said user experience is probably the biggest lever for adoption. If the product feels clunky, people won’t use it regardless of the underlying technology.
Ashna Vaghela from Mercuryo went further. Stablecoin payments need to feel like Apple Pay — tap, done, no friction, no conversion anxiety. That’s the bar. The industry is not there.
Ilya Podoynitsyn of FinHarbor added the regulatory layer. Compliance systems have to be adaptable because rules differ sharply across jurisdictions. A stablecoin product that works cleanly in one market can hit a wall in the next one. Building for that patchwork is expensive and slows everything down.
The stablecoin market has grown — market cap hit $306 billion, up around 2% year over year, following a roughly 74% expansion the prior year. So the numbers aren’t bad. But the infrastructure for actually spending stablecoins in daily life remains patchy, and that gap between holding and using is where adoption stalls.
Onchain Liquidity Is Harder to Read Than It Looks
Austin Federa of DoubleZero tackled the onchain trading side and didn’t sugarcoat it. Figuring out the true available liquidity across blockchain networks is genuinely difficult. It’s not just an execution problem — it’s a data problem. Platforms can’t always accurately read what liquidity actually exists onchain versus what looks like it’s there but isn’t.
Miguel Morel of Arkham Intelligence had a partial answer. Onchain data, used properly, can help firms manage counterparty risk. In prediction markets especially, some participants have better information than others — and if you can see where transactions are coming from, you can price that risk more accurately. Tighter spreads, better pricing for customers. The data is there; it’s about knowing how to use it.
Venture Capital Exits Are Getting Harder
The VC picture came up too, and it’s not comfortable. Pulkit Gupta from Nomad Capital said crypto market liquidity has been weak, and that’s hitting altcoin exits hard. Liquidity tends to concentrate in the larger tokens, which leaves venture investors holding positions in smaller assets with no clean way out.
Sonia Shaw of OneAsset said the market has matured enough that strong business fundamentals matter now in ways they didn’t a few years ago. Rapid exits — the kind that defined earlier crypto VC cycles — are harder to pull off. Investors want to see real businesses, not just token mechanics.
Aleksandr Nechaev of Funders VC said the pace of change in crypto is both the problem and the point. Things move fast. Founders who understand the space deeply — not just the technology but the market dynamics — are better positioned to navigate that. The event also featured a startup pitch competition powered by Funders VC, where adaptability was treated as a core criterion for investment, not just an afterthought.
Gupta’s read on altcoin liquidity is pretty grim short-term. No specific timeline offered. No clear catalyst named.
Frequently Asked Questions
Why are tokenized asset markets struggling with liquidity?
Supply of tokenized real-world assets — including pre-IPO stocks and commodities — has grown, but investor demand hasn’t kept pace, according to Alex Taaffe of GSR. Fragmented liquidity pools created by multiple issuers tokenizing the same asset make the problem worse, per Lingling Jiang of DWF Labs.
What would it take for stablecoins to see wider everyday adoption?
Panelists including Ashna Vaghela of Mercuryo said stablecoin payments need to be as seamless as Apple Pay, while Ilya Podoynitsyn of FinHarbor pointed to adaptable compliance systems across regions as a key requirement.
