RWAs Hitting New All-Time Highs as Investors Seek Safe-Haven Assets

reported that these assets are seeing steady inflows as safe-haven investments. However, it warned that because these assets exist on-chain, even minor shifts in sentiment can cause significant price swings due to their liquidity.

As the war in Ukraine enters its second year and the macroeconomic outlook remains uncertain, investors are increasingly turning to alternative asset classes, such as real-world assets (RWAs) and Bitcoin. These assets are seeing steady inflows as safe-haven investments. However, it warned that because these assets exist on-chain, even minor shifts in sentiment can cause significant price swings due to their liquidity.

RWAs hit an all-time high of over $17 billion in early February and are now nearing $20 billion, according to RWA.xyz. Some analysts believe that if Bitcoin struggles to regain momentum, RWAs could reach a $50 billion valuation by the end of 2025, capturing a larger share of the $450 trillion global asset market.

“If we see Bitcoin struggling to regain momentum in the coming months, I think we could see institutions shifting their attention to other asset classes within DeFi, especially in the RWA sector,” said Iliya Kalchev, an analyst at Nexo.

Meanwhile, inflation concerns continue to rise. The U.S. Commerce Department reported that the core Personal Consumption Expenditures (PCE) Price Index, the Federal Reserve’s preferred inflation measure, increased by 0.4% in February, the largest monthly rise in over a year. Economists had expected a 0.3% increase.

The report also showed that personal spending remained strong in February. Economical PCE now stands at 4.7%, up from January's reading of 4.6%. This is still a long way off the lows of 1.18% seen in February 2022.

“The strong PCE reading is likely to keep the Fed on course to continue raising interest rates in March, despite the recent bank failures and the widening credit crunch,” said Ben Marwick, an economist at Danske Bank.

Investors are responding by rotating out of risk-heavy positions, contributing to the ongoing volatility in both traditional and digital markets. The so-called “Magnificent 7” tech stocks have lost more than $3 trillion in market capitalization in recent weeks.