TD Cowen sees onchain capital surpassing $100 trillion in five years amid tokenization push

Onchain capital has swelled to roughly $4.6 trillion since 2020 but could exceed $100 trillion within five years, TD Cowen wrote in a new note, arguing that political and regulatory momentum has outpaced expectations and that major financial institutions are converging on common protocols for moving assets on blockchain.

The bank’s analysts, fresh from Blockworks’ Digital Asset Summit in London, said tokenization’s appeal lies in its practical benefits: lower costs and faster settlement for cross-border transfers, alongside programmable finance that directly integrates with capital markets plumbing.

They cited conversations with executives from JPMorgan, Bank of America, Euroclear, and Tradeweb, among others, while painting the rise of staked assets like ether as a key part of onchain capital formation’s yield engine.

Ethereum Transaction Volume and Average Ether Price by Quarter, 4Q20 to 3Q25 | Images: TD Cowen

Tokenization refers to issuing blockchain-based representations of traditional assets — such as bank deposits, money market funds, Treasuries, stocks, and real estate — so they can settle near-instantly, operate 24/7, and interoperate with smart contracts.

The pitch has moved from slide decks to pilots in recent months and years. BNY Mellon is exploring tokenized deposits to modernize payments, while BlackRock is evaluating tokenizing funds tied to real-world assets.

Policy tailwinds are forming, too. The U.K. plans to appoint a “digital markets champion” to coordinate tokenization across wholesale markets, and large U.S. and European banks are jointly exploring a stablecoin product. Such an outcome could provide a complementary onchain cash leg that many banks say will sit alongside deposit tokens.

Demand appears to be building on the buy side. A State Street survey found that most institutional investors expect their digital-asset exposure to double within three years, with more than half anticipating that 10%–24% of their portfolios will be tokenized by 2030. Robinhood’s CEO has likewise predicted that most major markets will have a tokenization framework by 2030.

“While the path remains bumpy, political/regulatory progress has far exceeded what we had expected even two years ago,” TD Cowen analysts wrote. “On-chain capital formation could be $100 trillion or more in five years, in our opinion, suggesting the trend is too big to ignore.”

If large institutions settle on shared standards, the bank argues, onchain assets could hit the kind of inflection that pushes tokenization from pilots to production at scale.