By Anatoly Crachilov, CEO and Founding Partner at Nickel Digital Asset Management
The growing adoption of tokenised funds reflects a broader transformation within capital markets that has been building momentum in recent years. By retaining the familiar investment structure that investors know and trust while leveraging blockchain technology, tokenised funds introduce a range of new capabilities such as near-instant settlement, 24/7 trading and enhanced transparency for both institutional and individual investors. This advanced infrastructure aligns with the demands of today’s faster and more interconnected financial system, and appeals to investors seeking more cost-effective ways to diversify portfolios and manage their risk more dynamically.
In recent years, leading global institutions have begun launching or exploring tokenised products, reflecting growing confidence in the innovative model and its potential to reshape the market. Our recent survey found that 97% of institutional investors believe that major asset managers launching tokenised ETFs will help drive wider adoption of the technology, a view we share. BlackRock, for example, which manages over $2 trillion in traditional ETFs, recognised the opportunity that tokenisation presents and launched its first tokenised fund, BUIDL, in 2024. After launching in March 2024 with around $180m in assets, by March 2025 BUIDL had surpassed $1bn assets under management and continued to grow to $2.5bn by late 2025, highlighting the strong demand for blockchain-enabled investment structures.
The broader market for tokenised real-world assets has also expanded rapidly, growing from around $10 billion in 2024 to more than $25 billion earlier this year. As more institutions continue to launch and support tokenised products, they will play an important role in bridging the gap between traditional investment strategies and the digital asset ecosystem.
A number of innovative models are emerging, demonstrating how technology is reshaping the investment landscape and accelerating the transition of tokenisation from a conceptual idea to mainstream adoption. One of the most transformative developments is fractional ownership. While the concept of shared ownership already exists within traditional ETF structures, tokenised ETFs allow assets to be divided into much smaller digital units on blockchain networks, enabling more granular portfolio construction through enhanced precision and flexibility compared to traditional ETFs. The fractional ownership also opens the door for investors to gain exposure to assets that were previously hard-to-access, providing more diversification within their portfolios, and the potential for greater returns from assets that, without tokenised ETFs, investors could struggle to access. By lowering barriers to entry, smaller family offices and even retail investors can access strategies that were previously mainly within the remit of large allocators. Fractional ownership and reduced entry barriers will help create a more efficient investment environment by fostering a more diverse and liquid investor base. This is expected to become a key component of the market evolving towards greater accessibility.
Another key innovation is the integration of decentralised trading platforms with tokenised assets. Unlike traditional ETFs, which are constrained by fixed trading hours and rely heavily on intermediaries to facilitate transactions, tokenised ETFs can trade continuously. This 24/7 market access would fundamentally change how investors interact with their portfolios, allowing them to respond to market developments in real time.
Presently, the 9:30 am to 4 pm trading hours over 5 working days, or 32.5 hours of available trading time, capture less than 20% of the available calendar hours. The potential 5x increase in trading hours offered by the new technology, enables investors to adjust their positions more dynamically, rather than wait for markets to open before responding.
However, this continuous trading environment also introduces new operational and risk challenges. Nickel Digital’s CEO, Anatoly Crachilov, notes: “The instant market access provided by tokenised ETFs enhances opportunity but demands equally agile risk oversight mechanisms to dynamically adjust portfolio exposure.”
Regulatory developments over the past six months have also catalysed the expansion of tokenised ETFs. Several European jurisdictions have launched pilot programmes involving established banking institutions to explore how tokenised securities can operate within existing regulatory frameworks. While the results of these initiatives are still emerging, regulators' willingness to engage with the technology demonstrates a growing recognition that digital assets are not a passing trend but are becoming an integral part of the evolving financial infrastructure.
As JPMorgan Chase CEO Jamie Dimon commented earlier this year: “Digital assets and tokenisation are an inevitable part of the future financial ecosystem. It’s no longer a question of if banks and investors will adopt these technologies, but how quickly they can do so to meet client expectations and unlock new efficiencies.” If tokenised ETFs continue to grow at their current pace, they will significantly accelerate the broader acceptance of blockchain technology and potentially pave the way for wider adoption of digital assets more generally.
Institutional participation, such as the critical DTCC pivot project with Nasdaq, which allows equity trades to be settled in either blockchain or traditional ledger at clients' discretion, plays a crucial role in building trust in emerging financial technologies, helping to overcome lingering scepticism and demonstrating the practical benefits of these innovations. In this sense, the increasing embrace of tokenised ETFs by major financial institutions may prove to be a key catalyst in bringing digital assets closer to mainstream adoption.
London's award-winning Nickel Digital Asset Management is a regulated investment manager at the forefront of merging traditional finance with the fast-paced digital asset market. We have designed a diverse portfolio of funds specifically for institutional clients, capitalising on the volatility of digital asset markets. By adapting arbitrage and technical analysis techniques from traditional financial markets, we generate non-directional or venture-style returns while maintaining a monthly liquidity profile.