How has the xStocks tokenization stock market developed?

Author: Heechang

Compiled by: ShenChao TechFlow

xStocks provides tokenized stock services, allowing investors to trade tokenized versions of popular US stocks (such as Tesla) in real-time. Although it is still in the early stages, it has already shown some interesting phenomena.

Observation 1: Trading concentrated on Tesla (TSLA)

Similar to many emerging markets, trading activity has quickly concentrated on a few stocks. Data shows that trading volume is highly concentrated on the most well-known and volatile stocks, with Tesla being the most prominent example.

This concentration is not surprising: liquidity tends to accumulate in assets that retail investors are already optimistic about, and early participants often use familiar high beta stocks to test new infrastructure.

Observation 2: Weekend liquidity decreases

Data shows that the on-chain stock trading volume over the weekend has dropped to 30% or lower of the weekday level. Unlike crypto native assets that allow for seamless trading around the clock, tokenized stocks still inherit the behavioral inertia of traditional market trading hours. When reference markets (such as NASDAQ and the New York Stock Exchange) are closed, traders seem less willing to engage in trading, which may be due to concerns over arbitrage, price gaps, and the inability to hedge positions off-chain.

Observation 3: Price is in line with the Nasdaq

Another key signal comes from the pricing behavior in the early stages of the launch. Initially, the trading price of the xStocks token was significantly higher than that of its corresponding stocks on Nasdaq, reflecting market enthusiasm and the potential friction in bridging fiat liquidity. However, over time, these premiums gradually decreased.

The current trading model shows that the token price is at the upper limit of Tesla's intraday price range, highly consistent with the Nasdaq reference price.

Arbitrageurs seem to maintain this price discipline, but there are still slight deviations at intraday highs, indicating that there may be some inefficiencies in the market that could present opportunities and risks for active traders.

New opportunities for Korean stock investors?

Korean investors currently hold over $100 billion in US stocks, with trading volume increasing 17 times since January 2020. The existing infrastructure for Korean investors trading US stocks faces numerous limitations such as high costs, long settlement times, and slow cash-out processes, creating opportunities for tokenized or on-chain mirrored stocks. As the infrastructure and platforms supporting the on-chain US stock market continue to improve, a new group of Korean traders will enter the crypto market, which is undoubtedly a huge opportunity.