Author: Nancy, PANews
Original Title: Tokenized Stocks Become Crypto's New Darling, What About Altcoins?
"It's time to move beyond Bitcoin and meme coins. The market is shifting towards 24/7 on-chain trading and real assets with actual utility," said Robinhood CEO Vlad Tenev after officially announcing the launch of tokenized stock trading. This statement captures the current wave of tokenized stocks and reveals the profound transformation happening in the crypto market.
As platforms like Robinhood, Kraken, and Coinbase successively deploy tokenized stock strategies, the crypto world is experiencing a reshaping of market structure and capital flow. Some voices believe that tokenized stocks, as a significant innovation in the crypto field, could expand the overall market capital scale and help the crypto ecosystem move from the margins to the mainstream. Others argue that the introduction of high-quality assets might pose a serious challenge to altcoins driven by narratives. Currently, tokenized stocks are still in the early stage, facing multiple challenges such as insufficient liquidity and regulatory hurdles.
Altcoins Heading Towards Marginalization?
As traditional high-quality assets like US stocks gradually become "on-chain", the capital flow in the crypto market is quietly changing.
Some market perspectives suggest that tokenized traditional high-quality assets, with clear business models, compliant regulatory frameworks, and stable actual returns, are becoming the new favorite of on-chain funds, creating a suction effect on the altcoin market. Especially those tokens lacking actual revenue models, with immature products, and supported only by narratives are facing liquidity drought and survival pressure.
For instance, crypto KOL BITWU.ETH raised a sharp question: "When traditional high-quality assets are tokenized and tradable on-chain, do crypto native assets still have value? Why would investors gamble on an altcoin that 'might build a product' when they can directly purchase liquid, stable, and clearly valued targets like Apple and Tesla on-chain?" He believes that the structural differentiation of altcoins has officially begun, and as more high-quality real assets appear on-chain, narrative-driven altcoins may be directly marginalized and eventually disappear.
This trend also signifies that the crypto market might be leaving behind the era driven solely by narratives and moving towards a more rational, value-oriented development path. Crypto analyst Crypto_Painter points out that altcoins may not completely disappear but will become increasingly difficult to survive. In the crypto market, each new high-quality asset undermines those assets maintaining price through consensus. The only path for altcoins is to generate actual application value that brings real income. All tokens unable to land and surviving merely through narratives will gradually enter a death cycle. The altcoin season might still exist, but the era of universal coin appreciation is over, and simple models are likely a thing of the past.
However, Qiao Wang from Alliance Dao believes that tokenized stocks won't kill altcoins, but stock perpetual contracts will, as they provide continuous new narratives and high volatility after leverage adjustment.
Wu Blockchain editor Colin Wu expressed a similar view. He noted that simply buying spot seems meaningless, and stock token perpetual contracts might be the real game-changer. Traditional CEXs might find it challenging, but decentralized platforms like Hypeliquid could potentially provide stock perpetual contracts effectively. Besides regulatory challenges, there would be a relatively long educational process for crypto and stock traders to adopt this hybrid trading instrument.
Traditional Finance's Cross-Border "Invasion"
Many crypto practitioners and KOLs expressed optimistic attitudes towards the tokenized stock trend, believing that putting stocks on-chain is not just an innovation in trading tools but could fundamentally transform securities trading ecology and pattern, and promote the scale and depth of the crypto market.
... (rest of the text continues)"In the future, there will be many innovations in stock tokenization, such as exploring perpetual equity contracts. These innovations may change the industry landscape. Now the U.S. SEC is also encouraging attempts at new things, which makes enterprises bolder and no longer afraid of legal risks or regulatory suppression." Galaxy Digital founder Mike Novogratz stated in a recent interview that Galaxy is currently collaborating with the SEC and may tokenize Galaxy's stock in the near future as a first step.
Aptos Foundation's ecosystem head Ash directly stated that stock tokenization is an arbitrage opportunity for emerging market users and an entry point to attract larger-scale retail users to cryptocurrency. If this trend truly emerges in the next 2-3 years, it will be extremely positive.
Still Facing Multiple Challenges Such as Insufficient Liquidity and Compliance
Although the concept of stock tokenization is gaining popularity, it is still in the early stage and far from forming sufficient market depth. According to xStocks data on Dune, its total trading volume is only about $8.05 million, with fewer than 8,000 users, and only three stock tokens (SPYx, TSLAx, CRCLx) reached $1 million in 24-hour trading volume. It is evident that actual on-chain liquidity remains quite limited.
Velocity Capital investor DeFi Cheetah also pointed out, combining early attempts like Mirror Protocol and Synthetix, that their key failure was lack of meaningful liquidity. Simply tokenizing stocks is not difficult; the real challenge is having sufficient liquidity to support global-scale trading, which is currently hard to match with traditional markets.
Dragonfly partner Rob Hadick also highlighted the structural flaws in current stock tokenization products. He noted that the market's expectations for stock tokenization are too high while details are insufficient. He believes that most platforms currently rely on SPVs (Special Purpose Vehicles) that will purchase equivalent real stocks in the market as collateral, but most can only buy during U.S. stock market hours. This means all after-hours/weekend trading requires market makers to bear price risks themselves. These price fluctuations are difficult or almost impossible to hedge in traditional finance. Moreover, even for redemption, market makers must bear transaction fees up to 25 basis points (bps), which is a high cost for them. Additionally, any DeFi protocol or market maker that inadvertently provides such token trading services to U.S. users faces compliance risks far higher than other crypto assets. This means weekend & after-hours trading is basically unsuitable for professional traders, price fluctuations are highly coupled with official opening prices, and such products are not user-friendly for most users.
Despite current challenges, Rob remains optimistic about the long-term potential of stock tokenization. "In the long term, when the primary market truly goes on-chain, collateral shifts to tokenized stocks, and traditional institutions upgrade their outdated technical architectures, we will ultimately see: stocks appearing on-chain with massive liquidity; smooth on-chain trading with accurate pricing and active institutional participation; and accelerated infrastructure integration between crypto and traditional finance. Only then will be the turning point for stock tokenization. The current products are just a small 'disappointment-type transitional product' on the path to the future, possibly bringing some discussion and experimental value, but not the ultimate solution."
