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The rise of tokenized stocks has led to a deep integration of TradFi and the crypto market.
The rise of tokenized stocks accelerates the integration of traditional assets and the crypto market
Recently, tokenized stock trading has become a hot topic in the crypto market. With several well-known trading platforms successively laying out in this field, the crypto world is undergoing a reshaping of market structure and capital flow. Some opinions suggest that tokenized stocks, as an important innovation in the encryption field, are expected to expand the overall market capital scale and push the crypto ecosystem towards the mainstream. There are also voices pointing out that the introduction of quality assets may impact narrative-driven altcoins. Currently, tokenized stocks are still in the early stages, facing multiple challenges such as insufficient liquidity and regulation.
Altcoins Face Survival Pressure
As traditional high-quality assets like US stocks gradually achieve "on-chain" status, the flow of funds in the crypto market is changing. Some market views suggest that tokenization of traditional high-quality assets, with clear business models, compliant regulatory frameworks, and stable actual returns, is becoming the new favorite for on-chain funds, creating a siphoning effect on the altcoin market. In particular, tokens that lack actual revenue models, have immature products, and rely solely on narratives to support their market value are facing liquidity depletion and survival pressure.
Some analyses indicate that when traditional high-quality assets are tokenized and can be traded on the chain, investors can directly purchase highly liquid, stable in volatility, and clearly valued targets on the chain, the appeal of altcoins may decline. This trend also marks the potential farewell of the crypto market to an era driven solely by narratives, moving towards a more rational development path oriented towards actual value.
However, there are also viewpoints that believe tokenized stocks themselves will not kill altcoins, but perpetual contracts for stocks may be the real threat. Because they possess a continuous stream of new narratives and high volatility adjusted for leverage. Some analysts point out that simply buying spot may not be significant, and the perpetual contracts for tokenized stocks could be the real trump card.
The Integration of Traditional Finance and the Crypto Market Accelerates
Many industry insiders are optimistic about the development prospects of tokenized stocks, believing that this is not only an innovation in trading tools but may also fundamentally change the ecology and landscape of securities trading, as well as promote the growth and depth of the crypto market.
There are views that point out that the integration of stocks on the blockchain as on-chain assets and ecosystems is key. Pure buying and selling transactions are just the tip of the iceberg; more importantly, it is the shift in regulatory attitudes. In addition, one of the main features of encryption technology is to lower transaction thresholds and promote trading freedom. Some users in regions that were originally unable to purchase securities now have new opportunities, and even shares of popular enterprises that are not publicly traded may circulate through tokenization.
From a more macro perspective, the tokenization of stocks indicates the crossover integration of traditional financial platforms into blockchain infrastructure. This marks a shift where, with the compliance process of crypto assets, traditional finance and crypto assets are no longer two distinctly separate camps, but rather beginning to merge. This could spark more innovations in the future, such as the tokenization of emerging companies, real estate, and even artworks.
Still facing multiple challenges
Despite the popularity of the tokenization of stocks, it is still in the early stages overall and has yet to form sufficient market depth. Data shows that the actual on-chain liquidity is still quite limited. Industry insiders point out that it is not difficult to simply tokenize stocks; the real challenge is having enough liquidity to support transactions on a global scale.
In addition, the current structure of tokenized stock products still has some issues. Most platforms rely on special purpose vehicles to purchase equivalent real stocks in the market as collateral, but they can only buy during U.S. stock market hours. This means that after-hours and weekend trading requires market makers to bear the price risk themselves, and these fluctuations are difficult to hedge in traditional finance. At the same time, compliance risk is also an important challenge.
Despite facing numerous challenges, tokenization of stocks is still considered to have immense potential in the long term. When the primary market is truly on-chain, collateral shifts to tokenized stocks, and traditional institutions upgrade their technological infrastructure, stocks may emerge on-chain in the form of large-scale liquidity, enabling smooth trading, accurate pricing, and active participation from institutions. At that time, the integration of infrastructure between encryption and traditional finance will further accelerate.