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Robinhood’s Vlad Tenev Drops RWA Bombshell. Oxbridge Re Could 100x by Next Year

With Bitcoin soaring, Robinhood’s Vlad Tenev just declared RWA tokenization is the next big thing. This sees him join a growing number of insiders, from Goldman Sachs to Blackrock, who are racing towards a mass tokenization of real-world assets on the blockchain. Here’s why this matters, and why Oxbridge Re and its SurancePlus subsidiary could see its shares 100x on the back of this.

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7 days ago  

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Robinhood's Vlad Tenev drops RWA tokenization bombshell

Bitcoin [$BTC] just crossed the magical $100k barrier last week.

So now the question is, “What’s next?”

The answer to that, of course, depends on what “next” means for you.

If by “next” you mean “I’d like to 10x my investment by 2030-35”, then maybe there is no next. Plenty of people reckon Bitcoin’s going to $1 million by then. So maybe stick with that.

But, if by “next” you mean something more like “I’d like to 100x my investment in the next 1-2 years”, then that probably ain’t gonna do it.

Instead, you might want to take a listen to what Robinhood’s [NASDAQ: HOOD] CEO, Vlad Tenev’s got to say.

He’s majorly long on RWA tokenization.

We’ve been telling this story for months now — RWA tokenization will take off in a major way in 2025, taking RWA stocks like Oxbridge Re [NASDAQ: OXBR] with it.

All the signs are there if you pay attention.

And increasingly, it seems, we’re no longer the only ones spotting those signs.

Vlad Tenev is just the latest to voice to join the chorus singing the praises of RWA tokenization.

Appearing on CNBC’s Squawk Box to talk about crypto in general — particularly Bitcoin’s [$BTC] meteoric rise since Trump’s election — Vlad had this to say when asked about what’s next: “So I think what you’re likely to see is tokenization… having more real-world assets, including stocks on blockchains. There’s big potential.”

We’re also starting to see RWA tokenization becoming a major theme at pretty much every business/investing/crypto conference out there.

Just this month, for example, RWA tokenization pioneer SurancePlus, an Oxbridge Re [NASDAQ: OXBR] subsidiary, is featuring at not one, not two, but three major conferences. This week, it’s Bitcoin MENA 2024. [PS: We’ll be talking more about SurancePlus later — massive RWA opportunity here.]

And let’s not forget the HUGE names that have all been piling into RWA tokenization over the last 6-9 months of this year. This includes the likes of Goldman Sachs, HSBC, and Blackrock (who, by the way, has committed itself to a $10 trillion RWA tokenization play).

So, what’s convincing everyone from Robinhood’s CEO to major real-world asset holders like Blackrock that RWA tokenization is the future?

Well, there are a number of reasons.

For Vlad, he sees it as the next evolution in FinTech. In his CNBC Squawk Box interview, he said RWA tokenization was “the next step in the technology evolution, from mainframe, to cloud, to blockchain.”

For others — and this is a big one — the major driver is that RWA tokenization offers a massive boost in liquidity for relatively illiquid assets.

The basic gist of the story here is that asset prices often include a bit of a ‘liquidity discount’. Basically, the more illiquid an asset is, the more hesitant investors are to dump significant sums of money into it.

Thus, we often see illiquid assets trading at up to a 50% discount on their fundamental value.

However, once you start tokenizing things on the blockchain — that is, fractionalizing it and boosting the velocity at which it can be traded — liquidity goes way up.

Therefore, if you’re someone like Blackrock (who literally owns entire countries’ combined GDPs worth of illiquid assets), RWA tokenization equals free money. As liquidity goes up, so too does an asset’s market value.

Simple as that.

And that’s why you can bet 2025 will be the year RWA tokenization takes off in a major way — there’s simply way too much money and institutional power behind it to stop it.

And let’s not forget that Trump just nominated Paul Atkins last week to head up the SEC.

That’s going to be a major boost to crypto in general, and RWA tokenization specifically.

In Trump’s words, Paul “believes in the promise of robust, innovative capital markets,” and “recognizes that digital assets & other innovations [i.e., RWA tokenization] are crucial to Making America Greater than Ever Before.”

Long story short, this RWA tokenization thing’s got major momentum.

So, how do we get in on the ground floor and make some serious money?

Here’s one play that should hit it big.

Watch This RWA Stock Fly in 2025 — The Oxbridge Re x SurancePlus Story

Taken at face value, Oxbridge Re [NASDAQ: OXBR] is a relatively unremarkable stock. Its core business, for most of its existence, has been reinsurance contracts. Essentially, it sells insurance for insurance companies. Hence the ‘re’ in reinsurance.

Now, fundamentally, there’s nothing wrong with this.

Reinsurance is a solid, long-term investing strategy. And Oxbridge finds itself in good company here. Names like Lloyd’s of London and Berkshire Hathaway are all in on it. (And yes, that’s the Berkshire Hathaway, of Warren Buffett fame.)

However, here’s the thing. Reinsurance companies have to play a low-leverage, risk-averse game. Thus, they can’t grow as fast as they otherwise could.

To understand why, think of a regular ‘retail’ insurance company. They can often grow at will. If they don’t have the capital requirements to cover claims from new clients they’d like to take on, then they only need to take out a bunch of reinsurance contracts and they’re covered.

However, once you get to the top of the insurance food chain — issuers of reinsurance contracts — meeting capital requirements is an absolute must. Reinsurers are the last ones holding the bag and, as such, it’s a capital-intensive slog of a business to get into.

Now, don’t get me wrong, there are great returns to be had over the long run. It’s just, those returns aren’t anywhere near as good as they could be.

And this is where RWA tokenization will completely change the game.

Enter RWA Tokenization and SurancePlus

So, we know reinsurance is a slow, capital-intensive game.

But this is where RWA tokenization can step in to help — if you can tokenize reinsurance contracts on the blockchain, you essentially allow individual investors to step up and collectively stake the capital requirements needed to issue a reinsurance contract. And, in return for staking their capital, those investors get a cut of the premiums.

Now, in theory, there was nothing stopping reinsurance companies from doing exactly this in the pre-RWA tokenization days.

In practice, however, things were a little more complicated.

For starters, there’s the simple cost of doing business in traditional capital markets — the more it costs to take on an investor, the bigger that investor necessarily has to be.

In his CNBC’s Squawk Box, Robinhood’s Vlad Tenev noted that blockchain technology had driven costs down 10x compared to traditional finance. And he was only comparing crypto with exchange-traded stocks and funds, which are already relatively efficient.

But, once you start getting blockchain involved with archaic, steam-powered capital markets exercises — courting, negotiating with, and entering into contracts with private investors — we’re now talking more on the order of 1000x. And that’s at the low end.

So, why’s this important?

In short, the more you drive down the “cost per investor” or “cost per contract”, the smaller each investor or contract can be. And this massively increases the pool of liquidity you can tap into.

And let’s not forget the famous ‘liquidity discount’. Investors are hesitant to drop large sums into illiquid assets. But, with RWA tokenization massively boosting the ease of trading while also slashing the minimum ‘contract size’, liquidity goes way up.

All of this is something Oxbridge Re recognized the power of way back in the early days of RWA tokenization. And so, they launched SurancePlus — the only publicly listed RWA tokenization play to date — and started developing a tokenized reinsurance product.

[PS: To date, SurancePlus’s first reinsurance token is well ahead of initial ROI projections.]

How SurancePlus Will 100x Oxbridge Re in 2025

I’m going to make a bold claim here. But, I have good reasons to make it, so let me first throw it out there.

SurancePlus will 100x Oxbridge Re’s valuation in 2025.

So, what’s my rationale?

Well, there are a number of factors playing into this. Here’s a quick summary.

1) SurancePlus is worth more than Oxbridge Re’s entire market cap

  • VC-backed reinsurance plays similar to SurancePlus are fetching GIANT valuations. For example, Re.xyz raised $14 million at a $100 million valuation as a seed-stage company.
  • Oxbridge Re is already an established company with a successful product, giving it an implied valuation of at least $100 million.
  • Meanwhile, Oxbridge Re’s entire market cap is less than a quarter of the value of its SurancePlus subsidiary alone.

2) RWA tokenization is growing exponentially, further boosting SurancePlus’s valuation

  • Over the last few years, RWA tokenization growth has followed a roughly exponential curve. This curve has only continued to accelerate throughout 2024.
  • In general, the valuations of RWA tokenization plays like SurancePlus will grow in proportion to the acceleration of this curve.
  • This will add another huge multiplier to the valuation of SurancePlus in 2025, and hence, the valuation of its parent company, Oxbridge Re [NASDAQ: OXBR].

3) As demand for RWA tokenization opportunities grows, SurancePlus has unlimited potential to meet this demand

  • Unlike Oxbridge Re’s traditional reinsurance business, SurancePlus can effectively grow without limits as SurancePlus has no capital requirements acting as a barrier. (Investors purchasing its reinsurance tokens are staking the capital.)
  • As demand from investors for RWA investment opportunities heats up, SurancePlus will be able to scale its business accordingly.
  • With unlimited growth potential and potentially unlimited demand, SurancePlus is now on the verge of a massive hypergrowth era.

4) Oxbridge Re is planning a massive ‘strategic’ move to further boost SurancePlus valuation

  • So far, investors have valued Oxbridge Re as a traditional reinsurance company and have largely ignored its SurancePlus business.
  • Oxbridge Re recently announced it was seeking ‘strategic alternatives’ for its SurancePlus business. Most likely, this will be a spin-off or an outside acquisition (potentially by Zoniqx with an additional investment by Ripple).
  • When this news drops, Oxbridge Re’s traditional reinsurance business will very likely retain its current valuation (It’s how investors are valuing the company right now). Thus, whatever SurancePlus fetches is 100% upside over and above Oxbridge Re’s current valuation.

5) Oxbridge Re is the only publicly traded RWA tokenization play

  • When RWA tokenization really takes off, there will not be enough RWA opportunities to meet investor demand. (This will look a lot like previous crypto/NFT hype cycles.)
  • To date, Oxbridge Re, via its SurancePlus subsidiary, is the only publicly listed RWA tokenization stock.
  • Once investors start piling into the limited RWA opportunities available, expect a period of overvaluations.
  • These overvaluations will drive Oxbridge Re [NASDAQ: OXBR] into massively overbought territory.

In short, once you take each of these factors and compound them together, there’s exceptionally good reason to believe that Oxbridge Re [NASDAQ: OXBR] will easily 100x in 2025.

And the growing momentum behind RWA tokenization these last few weeks only adds to this story. Especially now Robinhood’s Vlad Tenev is on board the RWA train.

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(Featured image by Fortune Brainstorm Tech (CC BY-NC-ND 2.0) via Flickr)

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Michael Jermaine Cards is a business executive and a financial journalist, with a focus on IT, innovation and transportation, as well as crypto and AI. He writes about robotics, automation, deep learning, multimodal transit, among others. He updates his readers on the latest market developments, tech and CBD stocks, and even the commodities industry. He does management consulting parallel to his writing, and has been based in Singapore for the past 15 years.

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