Tokenized Stocks Show Real Demand But Remain Volatile and Illiquid, IMF Finds — SkimNews
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- Tokenized equity trading occurs outside regular U.S. market hours in more than 50% of cases, with about 80% of trades involving less than one full share, a sign of strong retail demand for fractional ownership according to the IMF.
- The IMF studied five liquid tokenized U.S. equities—including tokens tracking Tesla, Nvidia, and the S&P 500—across 11 trading venues over 365 days.
- Traditional shares absorbed 87% to 99% of overnight price moves made by their tokenized counterparts when markets reopened, suggesting onchain prices carry real information.
- Tokenized equities were roughly 1.5 times more volatile than the underlying stocks and far less liquid, particularly on decentralized exchanges where prices diverged further from traditional markets.
- Ondo Finance and Backed Finance's xStocks control more than 70% of the $2.3 billion tokenized stock market, both issuing synthetic tokens that offer price exposure without direct share ownership.
- ICE is working with OKX on 24/7 tokenized trading under an SEC innovation exemption, while Securitize brought tokenized Nvidia, Apple, and Amazon shares to Solana, Cboe struck an S&P deal for tokenized options, and Coinbase launched tokenized stocks for non-U.S. users on Base in August.
Why it matters: Retail traders get fractional, round-the-clock exposure to names like Nvidia and Tesla, but the 1.5x volatility premium and thin liquidity on decentralized venues mean overnight price discovery is messier than during regular hours. With Ondo Finance and Backed Finance's xStocks controlling more than 70% of the $2.3 billion market, a single protocol-level disruption could cascade through tokenized Tesla, Nvidia, and S&P 500 exposure almost instantly.
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