As of 2021, over 15 countries have defined jurisdictions for security tokens. Among banks and notable financial institutions across the world, 39 out of 100 are involved with blockchain applications for STOs.
A combined $22 million was raised by two STOs in 2017. This number grew to $442 million from 28 STOs just one year later. The European tokenized market is projected to grow at a CAGR of 85% from 2018 to 2024, according to Plutoneo.
STOs Growth Over Past Years
Before we move ahead with predicted future growth, let’s first analyze the past few years for STOs when the Security Tokens market was too young.
In 2017, only 5 STOs were revolving in the market, and two of these companies actually managed to raise $22 Million in that year. In 2019, this number increased to 83 STOs that managed to raise a couple of hundred million dollars.
Another thriving year for STOs was 2018. In this year, there were 35 STOs launched that managed to raise $434.95 million. This was a huge success if we compare it to the prior years’ market. This unstoppable growth was derived from the transparency of STOs that ICOs lacked to provide.
Then came 2020, which proved to be a lucky year for Security Token projects. There were over 64 successful STOs launched this year that managed to raise over a billion dollars.
With such exponential growth, there was still a lot of potential in the market as STOs were merely 1% of the total market that included ICOs and IPOs.
STO Industry in 2021
There are hundreds of STOs projects launched on various marketplaces for fundraising in this year alone. Experts like Herwig Konings also predicted a 10x growth in the year 2021. This projected growth is likely to happen due to increased trends and hundreds of new STO projects that carry great future potential.
The market for security tokens increased by over 500% in 2020, and we are still at the beginning of our journey. This number is expected to grow significantly by the end of the year, reaching over two billion dollars. We will see a lot of funds entering the security token space in 2021 as larger institutional firms enter the space. Over $100M is predicted to be raised by security token offerings this year.Herwig Konings, Founder of Security Token Group
In the next 5-10 years, Opimas predicts that over 30% of fundraising will be done through STOs. They are so sure about this growth because no other blockchain-based technology is currently providing such a well-regulated and transparent system for investors and stakeholders.
As of 2021, an emerging market for STO tokens is Real Estate. The property owners are now going towards the tokenization of their hard assets. Liquidity is a major concern when it comes to hard assets like Real Estate. Eventually, tokenization will increase the liquidity of such assets, and it will bring more investors to the Real Estate market.
The CEO of BlockState, Paul Claudius, is also positive about the STOs’ growth.
Tokenization has often been hailed as the solution to all the problems related to ICOs and utility tokens; however, one has to keep in mind that the market is still maturing. It is really exciting to see that major financial players like solarisBank or the Swiss stock exchange are building solutions to integrate this technology into the existing market infrastructure. At the same time, increased demand for token-based fundraising can be observed among issuers and investors.Paul Claudius, CEO of BlockState
STOs – A Bigger Picture
The comments from experts working on STO technology predict the upcoming growth based on the recent performance of various projects. These comments are not just based on speculations, but they are backed with historical data from the year 2017 to 2020. If STO keeps growing at the same pace, then an 85% CAGR is not impossible within the current and upcoming years.
Security Token Offerings are bringing a lot to the table for both investors and projects. They will certainly outrank ICOs that are less reliable and more scammy. Currently, there are limited jurisdictions where STOs are regulated, but within a few years, more countries will eventually accept and adopt this technology.
With this fast adoption, the STO market will experience a 10x or even more growth per year. We won’t know the STO stats for 2021 until the end of the year, but it is certain that they will perform a lot better than last year when they touched their all-time high.
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