Why Tokenized Stocks Are Booming Marking A Trend Change

Token Terminal compared todays tokenized stocks to stablecoins in 2020, a period before stablecoins exploded into a market now worth hundreds of billions of dollars.

What Are Tokenized Stocks？

Tokenized stocks are digital tokens that represent real-world shares like Apple, Tesla, or ETFs. These assets are brought on-chain using blockchain technology, allowing investors to trade traditional equities inside crypto ecosystems.

They fall under the broader category of Real World Assets (RWAs), which aim to connect traditional finance with decentralized finance.

RWA Growth Sets the Stage

The wider RWA sector has expanded over the past three years. Total value locked in RWAs has jumped from about $750 million in 2023 to more than $17 billion today, driven largely by tokenized U.S. Treasuries.

As yields in traditional DeFi products declined, investors began looking for new sources of stable returns. Tokenized stocks are now emerging as the next step in this trend.

Regulatory Climate Turns Supportive

Earlier attempts at tokenized stocks failed, including offerings by major exchanges in 2021, mainly due to regulatory pressure. This time, the environment looks different.

A shift in U.S. political leadership and improving regulatory clarity have encouraged both institutions and crypto-native firms to return to the space. Nasdaq‘s proposal for tokenized securities and the U.S. SEC’s approval for DTCC to test tokenization services have added confidence to the market.

Related: Crypto Continues to Consolidate: Here Are Key Events To Watch This Week

Market Growth Driven by a Few Big Players

In 2025, tokenized equities have seen strong growth, especially in the second half of the year. According to DeFiLlama, the sector now holds about $635 million in total value locked, making it one of the largest RWA categories.

Most of this growth comes from Ondo Finance and Backed Finances xStocks, which together account for nearly 90% of the market. Popular tokenized assets include ETFs like SPY and QQQ, along with stocks such as Tesla and Google.

Bigger Growth Expected Ahead

Looking ahead, analysts expect tokenized stocks to grow even faster. On-chain research head Leon Waidmann said tokenized stocks and commodities could be the fastest-growing asset class in 2026.

Overall tokenized assets have already climbed to a new all-time high near $330 billion, up nearly three times from their 2023 lows, suggesting the trend is only beginning.