On the evening of November 6, 2024, the results of the US presidential election were announced, with the victory going to Republican candidate Donald Trump, who defeated Democratic opponent Kamala Devi Harris, becoming the 47th President of the United States. This result not only changed the political situation in the United States but also had a far-reaching impact on the global cryptocurrency market.
During the election campaign, Donald Trump publicly expressed support for Bitcoin and other cryptocurrencies. He promised to build a national Bitcoin reserve fund and establish a presidential advisory council on cryptocurrencies, called the "Presidential Advisory Council on Bitcoin and Cryptocurrencies." Trump said that cryptocurrencies embody a spirit of innovation and personal freedom, which is very much in line with core American values. He also pledged to support the industry so that the U.S. can dominate the global Bitcoin and blockchain technology markets.
When Trump was elected, the cryptocurrency market immediately exploded, with Bitcoin rising sharply, setting a new record high. On November 13, Bitcoin crossed the $93,000 threshold for the first time, opening the door to continue heading towards $100,000 in the following days.
Although Bitcoin is experiencing strong growth and is setting new records in value, altcoins (alternative cryptocurrencies) are not commensurate with this wave of growth. While Bitcoin attracts almost all of the new money flowing into the cryptocurrency market, altcoins continue to face major challenges, especially the lack of liquidity and stability in value.
Bitcoin is now dominating the cryptocurrency market, not only because of its prominence, but also because it is seen as a "digital gold" and a store of value. This means that large investors, including traditional financial institutions and investment funds, are all looking to Bitcoin as a key option in their cryptocurrency portfolios.
In contrast, altcoins — cryptocurrencies other than Bitcoin — have not received the same attention. While many altcoins, such as Ethereum, Solana, and Cardano, have unique technologies and features, they have not been able to generate as strong appeal as Bitcoin in the eyes of large investors. Part of the reason is that altcoins lack the stability and high liquidity that Bitcoin already has, and there are not enough practical applications to create incentives to attract investors. The connection between altcoins and Bitcoin is increasingly blurred. During Bitcoin's strong growths, many altcoins have been unable to sustain their growth momentum or even fall in price, which shows a lack of a solid foundation to maintain their attractiveness to investors. While Bitcoin retains its leading role in the market, altcoins cannot be separated from Bitcoin's volatility, resulting in a lack of independence in value and an inability to attract long-term cash flows.
Despite facing such difficulties, altcoins can still find opportunities if they know how to build and develop a practical application ecosystem that can solve specific problems in everyday life. This approach will help them overcome their dependence on Bitcoin and aim to create sustainable and long-term value in the cryptocurrency market.
For example, Ethereum has expanded its role not only as a cryptocurrency but also as the platform for a wide range of decentralized applications (dApps) and smart contracts. Ethereum's strong growth has created a full ecosystem with DeFi (decentralized finance) applications, NFTs (non-fungible digital assets), and many other technologies. This has helped Ethereum maintain its role as one of the strongest altcoins and remain attractive to investors.
Similarly, Solana, with its fast transaction processing and low costs, has created a thriving application community, especially in the fields of decentralized finance and NFTs. If other altcoins can find a similar direction, focus on practical applications and solve major problems in society, they will be able to maintain stable development and attract the interest of both individual and institutional investors.
Another important factor that makes altcoins able to overcome this difficult period is innovation in technology and practical applications. As Bitcoin and Ethereum have made a name for themselves in finance and payments, altcoins need to find new areas of application where they can make a marked difference.
Altcoin projects can focus on building tools that help solve problems in other areas such as security, decentralized data, or providing infrastructure for Web3. For example, platforms such as Polkadot and Cosmos are building solutions that help connect different blockchains together, ushering in a new era of interoperability between different ecosystems.
In addition, altcoins can invest in fast-growing sectors such as the Internet of Things (IoT), artificial intelligence (AI), and security technologies, where blockchain can provide significant added value. These initiatives will help altcoins create a separate market and not be overly dependent on Bitcoin's volatility.
Web3, defined as a new internet ecosystem based on blockchain, cryptocurrencies, and other distributed technologies, attracted strong attention in 2021. However, so far, Web3 still faces the big question: what is its actual application? Although blockchain and cryptocurrencies have made solid progress, Web3 applications have not really found their place in daily life.
The Web3 market experienced a downturn in 2022, when investments in NFTs and cryptocurrencies nearly collapsed. Meanwhile, AI (Artificial Intelligence) has exploded strongly with the introduction of ChatGPT from OpenAI, proving a technological breakthrough in this field. This makes Web3, once expected to create a "magic moment" like AI, have to continue to look for a new path.
RWA(Real World Assets) is one of the potential trends that could shape the future of Web3. It refers to thetokenization of real-world assets, such as real estate, commodities, art, or financial assets, and trade them on a blockchain platform. Not only does this open up great opportunities for Web3 to connect the traditional financial world with blockchain technology, but it can also create a major turning point in the application of these technologies to actual transactions.
In contrast to the current lack of practical applications of Web3, RWA can create a critical bridge, taking Web3 from an ecosystem that primarily exists in virtual space, to an integral part of global financial transactions. Tokenization of actual assets helpsIncreased liquidity, reducing transaction costs and bringingTransparencyin financial activities. This creates an environment where assets can be efficiently traded, stored, and verified without the need for traditional intermediaries. Actualmajor financial institutionsand the government is starting to pay attention and experiment with RWA. Big guys likeBlackRock,JPMorgan, or even governments of countries such asHongKong( China )has started implementing asset tokenization projects to issue bonds or financial funds on the blockchain. This shows thatWeb3can become part of the global financial system, not only as a technology for trading cryptocurrencies, but also as a tool to helpenhancing market efficiencyandImprove access to financefor users.
However, in order for RWA to truly promote its potential, it will face many challenges, especially in solving problemsLegalandregulation. Regulations on digital assets, user protection and international standards are still quite scattered, making the application of RWA in practice face many barriers. However,RWAis not merely a trend butthe key to Web3 being transformative, making it possible for Web3 to reach out of the closed circle of crypto projects and become an important part of mainstream financial systems. If these challenges can be overcome,RWA can scale Web3, transforming it from a niche technology into a vast industry that can compete directly with traditional financial systems. This is an important opportunity toWeb3not only exists in the virtual world, but can becomeAn integral partof global finance.
Major financial institutions such as BlackRock, JP Morgan, and HSBC have started exploring tokenized financial products. In March 2024, BlackRock released its first tokenized fund on the blockchain, opening the door for blockchain adoption in traditional assets. Large companies are also working on tokenizing financial instruments such as sovereign bonds and investment funds, which opens up a huge opportunity for Web3 adoption in the financial sector.
In addition, some governments and financial institutions are experimenting with issuing government-guaranteed green bonds on the blockchain, such as the Hong Kong SAR government. This shows the growing interest of financial institutions and governments in RWA in the Web3 space.
While RWA offers great opportunities for Web3, the tokenization of actual assets still faces some major challenges. Especially legal and regulatory issues between countries, where the legal framework for digital assets and cryptocurrencies is still not consistent. However, financial products such as stocks, ETFs, and bonds can be easily put on the blockchain thanks to their standardized processes.
Another challenge is the fact that RWA has encountered "resistance" from pure Web3 supporters, who advocate a fully decentralized ecosystem. However, the adoption of some "centralized" elements in asset management and compliance with regulations can help Web3 access a large amount of capital and users, laying the foundation for sustainable development.
While RWA currently faces a number of legal and regulatory hurdles, they could become a key factor in helping Web3 achieve its own "magic moment." RWA not only helps Web3 attract the attention of large financial institutions, but it can also bring great financial opportunities to businesses and investors across the globe.
With the entry of traditional financial institutions, RWA is gradually becoming an integral part of the future of Web3. This not only opens up opportunities for large businesses, but also helps Web3 projects to be truly valuable and widely applied in society.
Frequently Asked Questions about Web3 and RWA (Real World Assets):
RWA (Real World Assets) is atokenization of physical assets, such as real estate, commodities, art, and financial assets, to be transacted on the blockchain. RWA helps Web3 expand beyond virtual space and connect with actual financial transactions, creating an important bridge between blockchain and the traditional financial system.
RWA can solve the problem of lack of real-world applications in Web3 by putting real-world assets on the blockchain. This not only increases liquidity but also reduces transaction costs, while improving transparency and efficiency in financial transactions.
The biggest challenge in applying RWA is legal and regulatory issues. Each country has a different legal system for digital assets and blockchain, which creates fragmentation in how RWA is managed and regulated. Successful implementation requires cooperation and consensus from global financial regulators.
Major financial institutions such asBlackRock,JPMorgan, and governments such asHong Kong(China) began testing with RWA. For example, they issue bonds or tokenized funds on the blockchain, showing that Web3 can be integrated into mainstream financial systems, providing greater efficiency and access to finance.
Web3 needs RWA to be able toScale and engage usersglobal. Without real-world applications like RWA, Web3 will be difficult to overcome the limitations of a niche technology, unable to compete with traditional financial systems. RWA will help Web3 move towards a new era where blockchain technology not only exists in the virtual world but is also widely applied in actual financial transactions.
