Security tokens offer a variety of benefits. In an independent ecosystem where an exchange of value takes place, the tokens can create a store of value, provide reward systems or give the ability to be included in company profits. For example, BAT tokens, distributed by the Brave web browser, enable users to advertise within the Brave platform.
“I think the security token market will absolutely dwarf the size of the cryptocurrency market. I believe that will happen by the end of 2021,” James said.
As security tokens enter the market at a larger scale, the emergence of a derivatives market becomes more of a meaningful possibility.
“At that point, we’ll start to see leverage being applied to security tokens, with three, five and 10 times leverage, which, again, will just continue to drive the market. I think, at that point, we’ll see a huge spike in acceleration in terms of the growth of this market and the demand for these new investment products,” said James.
Injecting liquidity in this market could have major outcomes. In fact, Caspian announced on March 20 that it is building a cryptocurrency derivatives trading platform. Last August, Level Trading Field launched an Ethereum-based cryptocurrency asset derivatives exchange called CADE.
Security tokens are well positioned to see significant growth in the years ahead. With a number of companies beginning to adopt tokens that are tied to different asset classes, from real estate to government-issued currencies, the scale of this market could extend to a much broader market than cryptocurrencies alone.
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Securities Disclosure: I, Dorothy Neufeld, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.
