Modern stock trading still runs on systems that were designed when every phone had a cord.
Robinhood's (HOOD 0.
24%) new tokenized stock gram, which rolled out to its European users this month, is the attempt to switch over to faster trade cessing pipes that are actually public blockchains (quite telling).
The brokerage is letting people buy crypto tokens that represent s of Apple, Tesla, or even, and it could potentially launch this feature in the U. Market soon (fascinating analysis).
Moreover, Conversely, The mise is 24/7 trading, near‑instant transaction settlement, and the ability to buy stocks directly using crypto (noteworthy indeed), in light of current trends.
That mise matters because the next wave of capital to enter crypto is ly to arrive through inflows to familiar tickers.
Here's what you need to know this trend, and how to take advantage of it with your, in this volatile climate.
Tokenized assets are going main Think of a tokenized stock as a crypto token that can (but does not always) confer ownership of the underlying stock.
Ideally, a company issues a token while it holds s of the stock that's being tokenized (quite telling), in light of current trends.
The investor buys the token from them, and then, in theory, holders of the token can redeem it for s of the stock if they choose to do so (which is quite significant).
The price of the token is tightly coupled to the price of the underlying stock, as the token is exchangeable for it, amid market uncertainty.
Another, far less desirable, implementation of the tokenization idea is a token that is artificially configured to mirror the price action of the underlying asset, without the token issuer actually owning any s at all.
Nevertheless, Typically, the tokens are set to mirror the performance of the s of.
However, These companies do not have stocks that are traded in highly liquid those for public companies, and some of them are nically not allowed to be traded without permission of the stock's issuer, considering recent developments.
Additionally, Image source: Getty Images, considering recent developments.
In such a situation, token issuers are viding a financial duct that's totally unmoored from the actual value of the asset, so there's nothing to stop holders from getting burned.
Of course, it's still possible to sell such tokens to a greater fool, but they are in no way investment-grade, and you should not buy them.
For its part, Robinhood says it will back its public company tokens with real equity (this bears monitoring).
But its OpenAI and SpaceX tokens rely solely on Robinhood's own hedging desk, meaning holders have no claim on the underlying es if things go sideways.
In other words, Robinhood issues the less desirable and uninvestible type of tokenized stock, as well as tokenized s backed by its own holdings, given the current landscape.
But why bother with tokenization of stocks in general, in this volatile climate. In short, convenience. Traditional equity trades in the U, in light of current trends.
Furthermore, Settle the next day, they may incur fees, and the market shuts down for nights and weekends (quite telling), in today's market environment.
A blockchain can close a tokenized trade in seconds for less than a penny, and it never sleeps (something worth watching).
Robinhood is betting that this lining and wider trading window will win it new customers.
Furthermore, Furthermore, The upside could be massive for investors who position carefully in advance of this trend.
Boston Consulting Group (BCG) pegs the potential market for tokenized real-world assets (RWAs), including stocks, at $16. Additionally, 1 trillion by 2030 (fascinating analysis).
Today, only $22 billion in assets are actually tokenized on‑chain. $528 million of this trading volume is stocks, but that's changing quickly.
On the other hand, One chain could be the biggest beneficiary here Enter Solana, (SOL -6 (which is quite significant).
Additionally, 85%) the chain that handles thousands of transactions per second, with typical fees of fractions of a cent. Those attributes matter for its spects as a for tokenized stock trading.
The value of tokenized assets on Solana has soared 140% as of mid-July to reach more than $101 (fascinating analysis), considering recent developments.
Moreover, However, 6 million, outpacing the broader tokenization market and capturing the vast majority of this year's growth in the tokenized stocks segment.
XStocks, a Solana‑native ject launched on June 30, onboarded over 40,000 crypto wallets in its first week, offering more than 50 tokenized U.
For now, Solana's combination of throughput and cost gives it a first-mover advantage in tokenized stocks.
If the segment s the broader tokenization roadmap, capital will chase liquidity, reinforcing that lead.
Furthermore, Regulation could hobble the segment, or a faster competitor could emerge, so size your positions accordingly, in this volatile climate.
Investors interested in the tokenization wave thus have two main options.
One is to buy Robinhood and hope the brokerage scales the gram without angering regulators, and that its dalliance with issuing tokenized stocks of ends before there's serious fallout.
The better option is to own a sr of the tokenization rails via an investment in Solana or another chain that's going to be a hub for tokenized equity trading, in today's market environment.
Moreover, On the other hand, If tokenized equities graduate from curiosity to main channels, early exposure to Solana could look wise.
In contrast, Since it's a blockchain system rather than a company, multiple tokenized stock issuers could operate on Solana's network.
In contrast, That means that the regulatory risk to the network as a whole is much lower than an investment in Robinhood, in today's financial world.
Furthermore, Robinhood's investments in tokenization could still bring investors significant wealth, but so far, it simply doesn't seem to be tecting investors or educating them perly in light of its apach to issuing tokens.
This tells us that Author Alex Carchidi is a contributing Healthcare and Cryptocurrency Analyst at The Motley Fool, covering publicly traded companies and investments in the bio, pharma, cannabis, and digital asset industries.
Prior to The Motley Fool, Alex was a bench scientist and later a science writer at several biopharma companies, and started his career as a reer at the Ragon Institute of MGH, MIT, and Harvard.
On the other hand, He holds a B, in today's market environment. In Biology and a B, amid market uncertainty.
In Philosophy from Boston University, and an MBA with a concentration in Finance from the Isenberg School of at the University of Massachusetts, Amherst (this bears monitoring).
In his spare time, Alex enjoys traveling in Latin America and exploring the food scene of Greater Boston.
Conversely, TMFacarchidi X @alexcarchidi Alex Carchidi has positions in Apple, Solana, and Tesla. Moreover, What the data shows is Motley Fool has positions in and recommends Apple, Solana, and Tesla.
However, The Motley Fool has a disclosure policy.