As the hype surrounding the cryptocurrency market cools, trading in tokenized stocks continues to heat up, with on-chain transaction volume exceeding $37 billion in the third quarter
According to Zhitong Finance, while overall trading activity in the cryptocurrency market has cooled, the market for tokenized stocks, exchange-traded funds (ETFs), and novel derivatives is experiencing rapid growth. Driven by maturing regulatory frameworks, an accelerated push by Wall Street institutions, and rising investor demand for highly speculative trading products, asset tokenization is emerging as a new growth hotspot within the cryptocurrency industry.
A report released Thursday by blockchain analytics firm Dune Analytics reveals that on-chain trading volume for tokenized stocks and ETFs exceeded $37 billion in the third quarter—a nearly 18-fold increase in monthly volume since January of this year. These figures encompass over 200 trading platforms across 12 different blockchains—including those operated by OKX and the Intercontinental Exchange (ICE)—underscoring the swift expansion of the on-chain securities trading market.
Once a niche segment of the cryptocurrency sector, asset tokenization is now gaining traction among major Wall Street financial institutions. In September, the U.S. Securities and Exchange Commission (SEC) granted a five-year exemption allowing qualified trading platforms to facilitate the trading of tokenized U.S. stocks on a blockchain, providing further regulatory backing for the development of such offerings.
Meanwhile, Robinhood (HOOD.US) has recently introduced “Stock Tokens”—digital securities designed to track the prices of individual stocks, backed 1:1 by the underlying shares. Last month, the company also announced plans to launch weekend trading for U.S. stocks and offer leveraged perpetual futures for select cryptocurrencies, effectively pushing past the traditional operating-hour constraints of conventional financial markets.
Ric Edelman, founder of the Digital Assets Council of Financial Professionals, stated that as the financial services industry begins to replace existing securities with tokenized versions, asset tokenization will become the dominant theme for the cryptocurrency sector over the remainder of the decade.
He anticipates that this tokenization trend will eventually extend to other asset classes, such as real estate and collectibles, ultimately enabling 24/7 trading, same-day settlement (T+0), and a reduction in transaction costs to near-zero levels. 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 interested in trading based on the outcomes of specific events. These platforms allow traders to take positions on the probability of certain events occurring, offering a new avenue for those seeking high-risk, high-reward opportunities.
Meanwhile, perpetual futures products linked to stocks, ETFs, and stock indices have also seen rapid growth. According to data from Dune, trading volume for such perpetual futures on the Hyperliquid blockchain reached $201 billion in the third quarter—significantly higher than the on-chain trading volume for tokenized stocks and ETFs during the same period.
Mark Connors, Chief Investment Strategist at Risk Dimensions, views the development of asset tokenization as part of a broader trend toward the increasing “gamification” of investing. Connors points out that tokenization enhances the speed at which assets can be traded and transferred. With the rising popularity of platforms like Robinhood and various prediction markets, investors can now trade outside of traditional market hours while benefiting from lower transaction costs.
Beyond securities-related products, decentralized exchanges (DEXs) continue to expand their share of the cryptocurrency market. Data from Dune shows that spot trading volume on decentralized exchanges more than doubled last year, reaching $6.8 trillion. Currently, approximately 25% of all cryptocurrency spot trading takes place on-chain.
This trend stands in stark contrast to the performance of the broader cryptocurrency trading market, which has recently seen a decline in overall trading volume, a slowdown in inflows into crypto-related ETFs, and a cooling of the frenzy surrounding “meme coins.” At the same time, products such as short-term options and leveraged crypto trading have emerged as new channels for investors pursuing the potential for high returns.
Fredrik Haga, co-founder and CEO of Dune, notes that while tokenized stocks and stock-based perpetual futures began as separate market experiments, they are now converging into a unified on-chain stock trading market. He anticipates that as the underlying infrastructure, trading products, and the number of market participants continue to grow, the line between on-chain stock markets and traditional stock markets will become increasingly blurred with each passing quarter.