Although overall trading activity in the cryptocurrency market has cooled, the markets for tokenized stocks, exchange-traded funds (ETFs), and new derivatives are expanding rapidly. Driven by gradually improving regulatory frameworks, accelerating involvement from Wall Street institutions, and rising investor demand for highly speculative trading products, asset tokenization is becoming a new growth hotspot for the crypto industry.
A report released Thursday by blockchain data analytics firm Dune Analytics shows that on-chain trading volume for tokenized stocks and ETFs exceeded $37 billion in the third quarter, with monthly trading volume growing nearly 18-fold since January of this year. The figures cover more than 200 trading platforms across 12 blockchains, including OKX and Intercontinental Exchange's (ICE) tokenized stock trading platform, reflecting the rapid expansion of the on-chain securities trading market.
Asset tokenization, once a niche area within the crypto industry, is now gradually gaining recognition from major Wall Street financial institutions. In September, the U.S. Securities and Exchange Commission (SEC) approved a five-year exemption arrangement allowing eligible trading platforms to trade tokenized U.S. stocks on the blockchain, providing further regulatory support for the development of related businesses.
Meanwhile, Robinhood (HOOD.US) recently launched a tokenized stock product called Stock Tokens. These digital securities are designed to track the price of individual stocks and are backed 1:1 by the corresponding shares. The company also announced last month that it plans to launch weekend trading services for U.S. stocks and offer leveraged perpetual futures products for certain cryptocurrencies, further breaking through the trading-hour constraints of traditional financial markets.
Ric Edelman, founder of the Digital Assets Council of Financial Professionals, said that as the financial services industry begins to gradually replace existing securities with tokenized forms, asset tokenization will become the dominant theme for the crypto industry over the remainder of the next decade. He expects the tokenization trend to subsequently extend to other asset classes such as real estate and collectibles, ultimately enabling more assets to trade around the clock, settle on the same day (T+0), and bring trading costs down to near zero.
It is worth noting that the expansion of on-chain financial markets is not limited to tokenized stocks. Prediction market platforms such as Kalshi and Polymarket are attracting a growing number of investors focused on trading event outcomes. These platforms allow traders to take positions on the probability of specific events occurring, offering new trading channels for investors seeking high-risk, high-reward opportunities. At the same time, perpetual futures products linked to stocks, ETFs, and stock indices are also developing rapidly. Dune data shows that in the third quarter, trading volume of related perpetual futures on the Hyperliquid blockchain reached $201 billion, far exceeding the on-chain trading scale of tokenized stocks and ETFs during the same period.
Mark Connors, chief investment strategist at Risk Dimensions, believes that the development of asset tokenization is part of a broader trend toward the gamification of investing. Connors noted that tokenization can improve the speed of asset trading and transfer. As Robinhood and prediction market platforms become more widespread, investors can trade outside traditional trading hours while enjoying lower transaction costs. He compared this trend to the rise of ETFs. ETFs previously lowered the threshold for investors to allocate to assets such as gold and bitcoin, and also made it easier for investors to hedge risk through index ETFs. Tokenization is expected to further enhance the trading convenience of financial assets.
Beyond securities products, decentralized exchanges are also continuing to expand their share of the cryptocurrency market. Dune data shows that spot trading volume on decentralized exchanges more than doubled last year, reaching $6.8 trillion. Currently, about 25% of cryptocurrency spot trading is already completed on the blockchain. This trend stands in sharp contrast to the performance of the traditional cryptocurrency trading market. Recently, overall cryptocurrency trading volume has declined, inflows into related ETFs have slowed, and market enthusiasm for meme coins has also faded. At the same time, products such as short-term options and leveraged cryptocurrency trading are becoming new channels for some investors seeking high potential returns.
Fredrik Haga, co-founder and CEO of Dune, said that tokenized stocks and stock perpetual futures initially developed as two separate market experiments, but are now gradually merging into a unified on-chain stock trading market. He expects that as related infrastructure, trading products, and market participants continue to increase, the boundary between the on-chain stock market and the traditional stock market will blur further with each passing quarter.
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