Artificial intelligence and tokenization will usher in a new era of long-tail capital markets by 2025, according to Bitwise.

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Tokenization to Help Small Businesses Thrive

In a series of posts on X, Hunter Horsley, CEO of Bitwise, shared his predictions for the year 2025. According to Horsley, one of the key themes that will emerge is the potential for tokenization to help smaller businesses access capital markets. While the focus has been on demand-side benefits, such as democratizing access to money market funds, Horsley argues that the real revolutionary potential lies on the supply side.

The Transformative Power of Tokenization

Tokenization’s transformative power may come from enabling a vast untapped supply of smaller businesses to access capital markets. This, in turn, could lead to a surge in new companies and tokenized companies emerging. As Horsley noted, "AI could massively increase the number of niche businesses. These could never go public but could tokenize. It could be a major new long-tail capital market."

Real-World Asset Tokenization: A Growing Narrative

According to Edwin Mata, founder and CEO of Brickken, real-world asset (RWA) tokenization may be the next key narrative in the crypto space in 2025. RWA tokenization is transforming traditional markets by enabling assets like real estate, debt, and equity to be digitized and traded on the blockchain.

The Explosion of Micro Companies

As Horsley predicted, AI advances could lead to an explosion of micro companies that tokenize their businesses. This development has the potential to create a new long-tail capital market, which was previously inaccessible to smaller businesses. The example below illustrates how AI can boost tokenization:

Example: How AI Can Boost Tokenization

Source: Hunter Horsley

*   **AI-powered innovation**: New technologies and products are created using machine learning algorithms.
*   **Scalability**: AI enables small businesses to scale quickly, making them more attractive for investors.
*   **Tokenization**: Small businesses can tokenize their assets, creating a new class of digital securities that can be traded on the blockchain.

Corporate Bitcoin Adoption and Mergers & Acquisitions

Horsley also predicted that 2025 will see an increase in corporate Bitcoin adoption. Companies are starting to hold BTC on their balance sheets as part of their treasuries. MicroStrategy, for instance, has the largest corporate holding of BTC, with 446,400 coins worth around $43.7 billion at current market prices.

The Arrival of ‘Bitcoin Standard Corporations’

Horsley believes that a major theme in 2025 will be the emergence of "Bitcoin Standard Corporations," companies that hold BTC on their balance sheets. As Horsley noted:

"2025 is going to see a lot of corporations joining the Bitcoin standard."

The Unfreezing of Mergers & Acquisitions

The incoming Trump administration in the US may "unfreeze" mergers and acquisitions for large corporations, which could be beneficial for crypto adoption. According to Horsley:

"If [the ‘magnificent 7’ — Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia, and Tesla] can wield their market cap… it will accelerate crypto."

The Conceptual Premise of Crypto

Horsley’s comments highlight the core concept behind cryptocurrencies: trust is not vested in large institutions but rather in decentralized networks. The growth of corporate Bitcoin adoption could potentially disrupt this dynamic.

Conclusion

In conclusion, Hunter Horsley’s predictions suggest that 2025 will be a transformative year for cryptocurrency and related technologies. The emergence of smaller businesses, corporate Bitcoin adoption, and mergers & acquisitions could have significant implications for the industry as a whole.

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