IMF Report Highlights Volatility in Tokenized Stock Trading
- Over half of tokenized stock trading occurs outside regular U.S. market hours.
- Approximately 80% of trades involve less than one share, indicating demand for fractional ownership.
- Traditional stocks absorbed between 87% and 99% of overnight tokenized price moves at market open.
- Tokenized equities are about 1.5 times more volatile and less liquid compared to traditional stocks.
- The market is valued around $2.3 billion, with Ondo Finance and Backed Finance’s xStocks comprising over 70% of it.
The IMF’s findings indicate that while tokenized stocks show real demand, they remain volatile and illiquid, especially on decentralized exchanges where prices deviate from traditional markets.
Despite the volatility, systemic risks are currently limited, but the IMF advises regulators to consider circuit breakers for continuous trading and monitor connections with traditional markets closely.(Source)
