Is the ETF Outdated? Wall Street Is Betting on "On-Chain Equities"

Original Title: Are Tokenized Stocks the Next 「ETF's」For Bridging Crypto With Equities?

Original Author: @brianq, Santiment

Original Translation: Ding Dang, Odaily Planet Daily

Editor's Note: Following the launch of Bitcoin and Ethereum ETFs, the boundary between the crypto market and traditional finance is becoming increasingly blurred. Stock tokenization, as an innovative form of bringing traditional equity assets onto the blockchain, is gradually gaining market attention. By converting company stocks into digital tokens that can be traded on the blockchain, stock tokenization attempts to bridge the gap between traditional finance and crypto assets. Whether it is Coinbase's pioneering attempt to issue its stock on-chain or Wall Street giants accelerating their entry, various signs indicate that a new financial era built on on-chain stocks may have quietly begun. So, is stock tokenization a bubble or the next trillion-dollar opportunity? The following is the original article published by the on-chain data analysis platform Santiment, translated by Odaily Planet Daily:

Introduction

Is stock tokenization a reliable investment option? Essentially, it combines the value of traditional stocks with the technological advantages of blockchain. Unlike traditional stocks held in a brokerage account, stock tokenization is blockchain-based digital tokens anchored to actual company shares. This form allows investors to participate in investment with lower thresholds and in a fragmented manner, breaking the traditional market's restrictions on capital size.

In early 2025, Coinbase announced it would issue an on-chain tokenized version of its stock on its Ethereum Layer 2 network, Base. This move not only demonstrates the mainstream crypto platform's focus on this area but also serves as a signal of the accelerated integration of traditional finance and blockchain technology.

High-Speed Trading and Around-the-Clock Liquidity: The Core Advantages of Stock Tokenization

Traditional stock trading often faces issues such as long settlement periods and limited trading hours. The emergence of stock tokenization has brought a completely new solution to this model. Blockchain-based trading enables instant settlement, allowing investors to quickly respond to market fluctuations.

Innovative platforms like AlloX have already specifically built a stock tokenization trading market, supporting 24/7 uninterrupted trading, lower fees, and on-chain clearing mechanisms. This undoubtedly greatly enhances trading efficiency, rewriting the time and cost logic of the traditional stock market.

Wall Street Giants Are Also Joining the Trend: From Concept to Practice

Not only native crypto platforms, but traditional financial institutions are also quickly entering the space. Citigroup has partnered with the Swiss Digital Exchange (SDX) to jointly promote the tokenization of private company shares, allowing global investors to access the previously high-barrier venture capital market.

At the same time, JPMorgan Chase has already launched on-chain tokenized real asset products, indicating that this trend is not only recognized but also gradually being implemented.

By April 2025, the total market value of the stock tokenization market has exceeded $350 million. Multiple industry experts predict that this number is expected to grow towards $1 trillion in the future.

Although regulation is still in a gray area, under the push of a "crypto-friendly" U.S. government, policies are gradually opening up. Meanwhile, Switzerland and the European Union have already established clear compliance frameworks, bringing confidence to the entire market, also hinting at the possibility of the next wave of institutional-grade incremental funding.

The "Stabilizer" of Crypto Assets: A New Way to Hedge Risks at the Touch of a Button

For crypto investors, stock tokenization is not only an extension of asset allocation but also a new means of risk management. By converting cryptocurrencies such as Bitcoin or Ethereum into on-chain stocks, investors can achieve cross-market asset allocation, thereby enhancing portfolio stability.

For example, Backed Finance recently announced the launch of a tokenized version of Coinbase stock $wbCOIN on X, explicitly stating that the token is "fully collateralized, freely transferable, and carries legal ownership rights." This announcement quickly sparked 595,000 interactions, indicating a rapid surge in market interest in such products.

At the corporate level, companies are actively exploring the possibility of stock tokenization as a financing tool. Compared to traditional methods, stock tokenization not only lowers the financing threshold but also allows global investors to participate more conveniently in early-stage investments.

Traditional giants like BlackRock and JPMorgan Chase have already launched on-chain tokenization products, foreshadowing that stock tokenization is not just a "new toy" in the crypto sphere but is more likely to evolve into new infrastructure for cross-border finance.

Conclusion: Connecting Two Worlds Rather Than Replacing Either

Stock tokenization is unlikely to completely replace the traditional stock market, but its greatest value lies in "connecting"—opening the door to the crypto world for traditional investors, while also providing crypto users with tools to anchor real-world assets in their portfolios.

Just as the launch of Bitcoin and Ethereum ETFs has made it possible for mainstream capital to enter the crypto market, stock tokenization is also expected to become an important channel for the next round of fund inflows. In the future, it may become a key element in the crypto world's true "coming of age."

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