CryptoSlate
More than half of sampled tokenized US stock trading occurs outside Wall Street's regular hours, according to the IMF's October Global Financial Stability Report. The study also found roughly 80% of tokenized equity transactions involved less than one share, pointing to strong demand for fractional investing and around-the-clock access to American securities.
The IMF examined five of the most actively traded tokenized US equity products from Ondo and xStocks, covering exposure to the S&P 500, Nasdaq, Tesla, Alphabet and Nvidia. The analysis spanned 11 centralized and decentralized venues, more than 2 million five-minute price and volume observations over 365 trading days, and roughly $345 million in market value, or 15% of the $2.3 billion tokenized equity market as of July 31.
Why it matters
The activity suggests tokenized venues are absorbing information while conventional exchanges are closed. Overnight tokenized price movements showed an estimated 87% to 99% pass-through into the first five minutes of the next US trading session, indicating the two markets are tightly linked even though causality is not established.
The findings arrive as exchanges and financial institutions expand efforts to bring US equities onto blockchain rails, challenging conventional market hours and settlement arrangements. NYSE owner ICE and OKX are among those planning 24/7 tokenized stock trading.
Market impact
Market quality remains the weak point. Realized volatility on tokenized equities ran about 1.5 times their traditional equivalents, rising further on decentralized venues where thin depth lets small trades move prices disproportionately. Tokenized prices generally tracked underlying securities during regular hours, but deviations widened on decentralized platforms when volume was low.
The IMF put public tokenized real-world assets at roughly $65 billion as of July, a rounding error against the roughly $300 trillion traditional capital-markets complex. Systemic risk is limited at current scale, but the Fund warned that automated collateral management and continuous settlement could amplify selling pressure during illiquid overnight hours.
Frequently asked questions
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What share of tokenized US stock trading happens outside regular Wall Street hours?
The IMF found that more than half of the trading volume in sampled tokenized US equity products occurred outside the regular 9:30 a.m. to 4 p.m. Eastern session, including overnight and weekend periods.
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Which tokenized stock products did the IMF study?
The IMF examined five of the most actively traded tokenized US equity products issued by Ondo and xStocks, covering exposure to the S&P 500, Nasdaq, Tesla, Alphabet and Nvidia across 11 trading venues.
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How closely do overnight tokenized stock prices track the next regular trading session?
The IMF estimated an 87% to 99% pass-through from overnight tokenized price movements into the first five minutes of the next US trading session, though it did not establish that on-chain trading causes the price moves.
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How volatile are tokenized stocks compared to traditional equities?
Tokenized equities showed roughly 1.5 times the realized volatility of their traditional equivalents, with volatility rising further on decentralized venues where limited depth can produce outsized price moves.
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How large is the tokenized equity market relative to traditional capital markets?
The IMF estimated public tokenized real-world assets at roughly $65 billion as of July, including a $2.3 billion tokenized equity market, against approximately $300 trillion in traditional capital-market assets.
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