Ethereum-based decentralized exchange (DEX) Uniswap is grossly undervalued according to digital asset manager Bitwise. The firm’s leadership said the DEX is currently viewed as a “crypto trading app” eyeing the $2 trillion market.
But this is a “wrong framing” according to Bitwise CIO Matt Hougan. For him, the DEX is now not restricted to the crypto market. Credit and stock markets, amid a rapid tokenization boom, are also up for grabs.
For his part, Hunter Horsely, Bitwise CEO, noted,
The TAM for platforms like Uniswap, Aave, Morpho, etc is expanding beyond just crypto asset volume. ‘Onchain finance’ is a big opportunity for the space.
Amid tokenization and prediction markets, most analysts believe DEXs and crypto venues’ total addressable market (TAM) covers traditional capital markets.
Currently, the crypto segment is only $2T. Gold’s market is $30T, while the stock and credit sectors stand at $150T and $350T, respectively.
In other words, crypto trading venues can eye a nearly $600T capital market. And Uniswap is already making moves for this expanded potential.
Uniswap’s RWA boom
Since the Robinhood Chain integration last month, Uniswap has seen massive traction. One of the major growth segments is real-world assets (RWA) tokenization. The sub-sector has hit record $2.5B in volume, dominated by tokenized stocks.
Reacting to the explosive traction, Uniswap CEO Hayden Adams said,
Crazy to see it actually happening after all these years.
To further capture the tokenization boom and allow U.S investors regulated access to the products, Uniswap unveiled ‘permissioned pools.’ It comes with an allow-list for screening against sanctioned persons and organizations.
Will it boost UNI’s next leg of rally?
That said, the boom is expected to improve collected revenue, which directly goes into UNI buyback and burn program. In Q3, UNI rallied 95% from $2.3 to $4.5 thanks to the traction and renewed speculative activity across Robinhood Chain.
But UNI has since cooled off by 25% and eased to $3.46. Still, the pullback has hit a pivot inflection point of the 50% Fibonacci retracement level and the 200-day Moving Average (MA).
If Uniswap [UNI] bulls defend the 200-day MA, the altcoin could recover the August losses and reclaim $4.5. But cracking below the support would open the possibility of an extended dump to $3.0.
However, in the long run, Standard Chartered Bank expects UNI to rally 40x to $100, citing the tokenization boom.
Final Summary
- Uniswap RWA volume hit record $2.5B, led by tokenized stocks
- UNI’s 25% pullback in August has hit an inflection point at $3.46
