The popularity of the cryptocurrency market declined, but tokenized stock trading continued to heat up, and the volume of on-chain transactions exceeded 37 billion US dollars in the third quarter

The Zhitong Finance App learned that although the overall trading popularity of the cryptocurrency market has cooled down, the tokenized stocks, exchange-traded funds (ETF) and new derivatives markets are showing a rapid growth trend. Asset tokenization is becoming a new growth hotspot in the cryptocurrency industry, driven by the gradual improvement of the regulatory framework, the accelerated deployment of Wall Street institutions, and rising investor demand for highly speculative trading products.

According to a report released by blockchain data analysis company Dune Analytics on Thursday, the on-chain transaction volume of tokenized stocks and ETFs exceeded 37 billion US dollars in the third quarter, and monthly trading volume has increased nearly 18 times since January this year. The above statistics cover more than 200 trading platforms on 12 blockchains, including OKX and tokenized stock trading platforms under the Intercontinental Exchange (ICE), reflecting the rapid expansion of the on-chain securities trading market.

Asset tokenization, which once belonged to a niche area in the cryptocurrency industry, is now gradually being recognized by major financial institutions on Wall Street. In September of this year, the US Securities and Exchange Commission (SEC) approved a five-year exemption arrangement to allow eligible trading platforms to trade tokenized US stocks on the blockchain, providing further regulatory support for the development of related businesses.

Meanwhile, Robinhood (HOOD.US) recently launched a tokenized stock product called Stock Tokens. These digital securities are designed to track individual stock prices and are supported by corresponding stocks in a 1:1 ratio. The company also announced last month that it plans to launch a weekend trading service for US stocks and provide leveraged perpetual futures products for some cryptocurrencies, further breaking the trading time limits of traditional financial markets.

Ric Edelman, founder of the Digital Assets Council of Financial Professionals, said that as the financial services industry begins to gradually replace existing securities in the form of tokens, asset tokenization will be the dominant theme in the cryptocurrency industry for the rest of the next decade.

He anticipates that the tokenization trend will later expand to other asset classes such as real estate and collectibles, eventually driving more assets to achieve round-the-clock trading, same-day settlement (T+0), and reducing transaction costs to a level close to zero.

Notably, the expansion of the on-chain financial market is not limited to tokenized stocks. Predictive market platforms such as Kalshi and Polymarket are attracting more and more investors who focus on event outcome transactions. Such platforms allow traders to establish positions around the probability of a specific event occurring, providing a new trading channel for investors seeking high risk and high return.

At the same time, perpetual futures products linked to stocks, ETFs, and stock indices are also developing rapidly. According to Dune data, in the third quarter, the transaction volume of related perpetual futures on the Hyperliquid blockchain reached US$2010 billion, far higher than the on-chain transaction scale of tokenized stocks and ETFs during the same period.

Mark Connors, chief investment strategist at Risk Dimensions, believes that the development of asset tokenization is part of a broader trend of increasingly gamified investing. Connors notes that tokenization can increase the speed of asset transactions and transfers. With the gradual popularity of Robinhood and prediction market platforms, investors can trade outside of traditional trading hours while enjoying lower transaction costs.

He compared this trend to the rise of ETFs. ETFs previously lowered the threshold for investors to allocate assets such as gold and Bitcoin, and also made it easier for investors to hedge risks through index ETFs. Tokenization is expected to further improve the ease of trading financial assets.

In addition to securities products, decentralized exchanges are also continuing to expand their share in the cryptocurrency market. According to Dune data, the spot trading volume of decentralized exchanges more than doubled last year to reach 6.8 trillion US dollars. Currently, around 25% of cryptocurrency spot transactions have been completed on the blockchain.

This trend is in stark contrast to the performance of traditional cryptocurrency trading markets. Recently, the overall cryptocurrency trading volume has declined, the inflow of related ETF funds has slowed, and the popularity of the meme coin market has subsided. Meanwhile, products such as short-term options and leveraged cryptocurrency trading are becoming new channels for some investors to seek high potential returns.

Dune co-founder and CEO Fredrik Haga said that tokenized stocks and stock perpetual futures were initially two independently developed market experiments, but are now gradually being integrated into a unified on-chain stock exchange market. He anticipates that as related infrastructure, trading products, and market participants continue to increase, the line between the on-chain stock market and the traditional stock market will be further blurred every quarter in the future.