Avalanche's tokenization value experienced a substantial surge in the fourth quarter of 2025, fueled in part by BlackRock's USD Institutional Digital Liquidity Fund (BUIDL). This growth highlights the increasing adoption of the blockchain network by institutions, particularly in the areas of tokenized money market funds, loans, and indices.
The total value locked (TVL) in tokenized real-world assets (RWAs) on Avalanche saw a remarkable increase, climbing 68.6% during Q4 2025 and nearly 950% over the entire year, reaching over $1.3 billion. A significant contributor to this growth was the launch of BlackRock's BUIDL fund in November. This fund alone contributed $53 million to Avalanche's RWA value.
BlackRock's BUIDL fund, which went live in March 2024 on the Ethereum network, aims to maintain a stable value of $1 per token and distributes accrued dividends daily to investors' wallets. The fund invests entirely in cash, U.S. Treasury bills, and repurchase agreements, allowing investors to earn yield on assets that might otherwise remain idle. BUIDL has expanded to include other blockchains such as Solana, Aptos, and Optimism.
Beyond BlackRock's BUIDL, other TradFi firms are also experimenting with crypto tokenization. Fortune 500 fintech FIS partnered with Intain, an Avalanche-based marketplace, to launch tokenized loans in November. Intain facilitates the securitization of over $6 billion worth of loans from 2,000 US banks on the Avalanche network. Furthermore, S&P Dow Jones collaborated with Dinari, an Avalanche-powered blockchain, to introduce the S&P Digital Markets 50 Index, which tracks 35 crypto-linked stocks and 15 crypto tokens on Avalanche.
Avalanche's architecture, known for its high throughput and low fees, supports large-scale asset tokenization, making it attractive to institutional investors. Its compliance-friendly features and customizable subnets further enhance its ability to deploy financial products.
While Avalanche's tokenization value has boomed, the AVAX token itself has struggled. In Q4 2025, AVAX dropped 59% to $12.3, and it has further declined in 2026 to around $11. This contrasts sharply with the performance of Bitcoin (BTC) and Ether (ETH), which have reached new all-time highs during the same period. AVAX remains down over 92% from its all-time high of $144.96 in November 2021.
Despite the price struggles of the AVAX token, the value locked in native decentralized finance (DeFi) on Avalanche has increased, rising 34.5% in Q4 to 97.5 million AVAX. This indicates continued growth and activity within the Avalanche DeFi ecosystem.
The rise in tokenization on Avalanche, spurred by BlackRock's BUIDL and other institutional partnerships, points towards a growing convergence of traditional finance and decentralized platforms. As more institutions explore on-chain asset tokenization, Avalanche is well-positioned to capitalize on this trend, bridging the gap between traditional and decentralized finance. This is further supported by the Securities and Exchange Commission's openness to approving innovative crypto products.
