RWA Tokenization Boom Hides a Deep Liquidity Gap

A structural explanation for much of the dormancy lies in how a large portion of the market was designed. Roughly $27 billion of the core market consists of what researchers classify as "Represented" assets — tokens that were never intended to transfer publicly and instead function as digital receipts on permissioned ledgers for institutional settlement purposes. An ArXiv paper examining RWA liquidity conditions found that most RWA tokens exhibit low trading volumes, long holding periods, and limited investor participation, and that the majority of market growth is concentrated in yield-generating instruments such as private credit, tokenized bonds, and money market funds, typically issued by traditional financial institutions.

Market concentration compounds the liquidity picture. Just 62 assets hold 88% of total market value, and the top five products — Figure's HELOC product, Circle's USYC, Tether Gold, BlackRock's BUIDL fund, and Justoken's JMWH — account for roughly half the market on their own. The concentration of value in a small number of instruments is reflected in wallet-level data: Circle's USYC holds $2.96 billion distributed across just 44 wallet addresses, while BlackRock's BUIDL holds $2.42 billion across 109 addresses. Ethereum hosts 905 RWA products with $15.5 billion in value, representing a 44.47% market share of distributed assets, according to RWA.xyz platform data.

Governance token performance has diverged sharply from the underlying asset growth. Six of seven top RWA project tokens posted negative returns from January 2025 to March 2026, with losses ranging from -44.7% to -98.8%. That divergence suggests equity-like exposure to RWA infrastructure has not tracked the expansion of assets under tokenization, and that investors in project tokens have not captured the value accumulation visible at the asset level.

Infrastructure development has continued in parallel. BlackRock's BUIDL fund, which holds approximately $2.5 billion to $2.9 billion in tokenized US Treasuries, became tradeable on Uniswap via UniswapX in February 2026. The DTCC, which custodies over $114 trillion in securities, is piloting tokenized securities trading with more than 50 major firms including BlackRock, Goldman Sachs, JPMorgan, and Ripple Prime, with a possible commercial launch by October 2026. A separate pipeline of assets committed to tokenization but not yet freely tradable sits at approximately $345 billion, according to Blockchain Reporter's aggregation of RWA.xyz data. RWA.xyz's own platform currently shows a represented asset value of $370.22 billion.

Experts cited in the Yahoo Finance analysis pointed to blockchain fragmentation, regulatory silos, and the absence of secondary market infrastructure as the primary structural barriers. The distinction between Distributed tokens — freely tradable on public rails — and Represented tokens — institutional settlement instruments — was identified as a key source of confusion in headline market-size figures. The research context noted that US Treasuries have reached what analysts described as production-grade maturity, while private credit, commodities, real estate, and tokenized equities remain in limited distribution with minimal transfer activity.

The immediate concrete effect of the BeInCrypto analysis is to establish a documented baseline: of the assets large enough to measure, the majority by count and a substantial portion by value are not moving on-chain in any given week. What the report does not establish is whether the dormancy reflects deliberate hold-to-maturity strategies by institutional participants, technical barriers to transfer, or absence of buyer demand — nor does it identify which specific asset classes or issuers account for the largest share of inactive value within the $32.9 billion figure. The analysis also does not address whether the Represented asset structure, by design excluded from public transfer, should be counted against liquidity benchmarks applied to instruments that were issued with trading as an intended function.