Tokenization and the Rise of Passion Assets
A Picasso, a Patek Philippe, a 1960s Ferrari. For decades, these kinds of treasures sat in private vaults, changing hands quietly among the wealthy. They were prized for beauty, rarity, and status but not for liquidity. That’s beginning to change.
Through tokenization. The same technology reshaping financial markets is revolutionizing the world of these “passion assets”.
What is a passion asset?
Art, vintage watches, fine wine, classic cars, and collectible sneakers may seem worlds apart, but they share three traits: scarcity, personal attachment, and limited access. They are often seen as playgrounds for the affluent. Prices are high, information is limited, and selling takes time.
At the same time, these markets are expanding strongly. A recent industry report estimates the global collectibles market was valued at approximately US$306 billion in 2024 and is projected to reach US$535 billion by 2033. (Collectibles Market Size and Share | Industry Report, 2033” from Grand View Research )
Interest from younger investors is rising, especially among those drawn to alternative assets with a story.
The question is how to open that world without stripping away its soul.
What tokenization really does
Tokenization is opening fresh pathways for passion-asset investing.
One way this is done is by creating digital token that represents a specific artwork, wine bottle or collectible, so investors hold a share of that exact item, and the chain of ownership, storage and custody is tracked on-chain.
Another way is to use blockchain to issue a product tied to an index of assets, for example, a fine-wine index token backed by a basket of vaulted bottles. These “index-linked” tokens offer broader exposure to the market rather than to a single item.
Put simply, tokenization brings movement to assets that once sat still, by opening them to new investors and in some instances even letting owners unlock value without selling the whole asset.
Where it’s already happening
Startups and traditional players are experimenting fast. Some examples:
- Masterworks lets users buy fractional shares of high-end art, recently securitized under U.S. regulations.
- Rally and Courtyard.io handle collectibles, from trading cards to sneakers, held in insured vaults.
- BlockBar sells token-backed bottles of rare whisky and cognac, which owners can trade or redeem for the physical bottle.
Why collectors and investors (should) care
- Liquidity: Tokenization can shorten the time between decision and sale. Instead of waiting for the next auction, owners might list tokens on a regulated marketplace.
- Transparency: The blockchain record adds an extra layer of provenance, a digital chain of custody. For art and luxury goods, where authenticity defines value, that’s powerful.
- Access: Fractional ownership brings in a broader range of participants. A younger investor who can’t buy a £250,000 car outright might still take part in its appreciation.
- Programmability: Smart contracts can distribute rental income, museum exhibition fees, or resale profits automatically among token holders. Ownership becomes programmable. By replacing intermediaries and manual processing, this automation also cuts administrative costs and reduces transaction fees.
- Simpler logistics: Tokenization reduces the need to move or handle physical items. A bottle of fine wine, for example, can stay in a bonded warehouse (reducing the risk of damage) while ownership changes hands on-chain. The same goes for art, watches, or collectibles: fewer shipments, lower costs, and faster transactions, with tokens recording storage and transfer details automatically.
The hard parts
The excitement is real, but so are the constraints.
- Regulation: In many jurisdictions, fractional tokens are treated as securities, meaning platforms must follow investor-protection and disclosure rules. They need to verify investors, safeguard custody, and trade on licensed venues. These requirements can be costly and slow for smaller or early-stage projects.
- Custody: Someone still has to store, insure, and maintain the physical asset.
- Valuation: Art and collectibles don’t have daily price feeds, therefore pricing can be subjective.
- Liquidity traps: Just because something can trade on-chain doesn’t mean there’s demand to trade it.
Tokenization makes ownership easier to trade, but for now, these challenges remain. Turning tangible assets into digital investments isn’t frictionless, it requires trust, structure, and time.
More than a financial shift
Something cultural is happening too. Collective ownership changes the psychology of collecting. Instead of one person locking a masterpiece away, thousands can share a stake and maybe a sense of participation in art or heritage.
Communities form around these assets, from Discord channels to physical events. The line between collecting and investing blurs; passion becomes portfolio.
Where it’s going
Analysts expect trillions of dollars in real-world assets to be tokenized over the next decade. Passion assets will be a small slice of that pie, but an influential one. They capture imagination, media attention, and emotional connection.
As regulation matures and infrastructure improves, expect a gradual shift: more galleries and auction houses issuing tokens, more fintechs building secondary markets, and perhaps a new generation treating culture as an investable class.
The luxury car, the rare watch, the one-of-a-kind could become both an artwork and a liquid security. Tokenization won’t erase the mystique of owning something extraordinary. It might just open the doors to share it.
