Tokenized US stocks are not the "liquidity killer" of the crypto market

Author: Hu Tao, ChainCatcher

I. The Unestablished Liquidity Controversy

In the past few months, tokenized U.S. stocks have rapidly become one of the most discussed topics in the cryptocurrency industry.

From the emergence of platforms supporting on-chain stock trading to an increasing number of exchanges and DeFi protocols beginning to lay out related businesses, and the gradual clarification of the regulatory environment, the tokenization of U.S. stocks has evolved from a fringe concept to the most explosive direction in the entire RWA (Real World Assets) sector.

However, alongside the rapid rise in popularity, there has also been a concern in the market: when high-quality stock assets like Nvidia, Tesla, Apple, and Coinbase are moved on-chain, will the funds originally belonging to the crypto market be siphoned off by these traditional assets? Will Bitcoin, Ethereum, and even altcoins face greater liquidity pressure as a result?

This concern is not without basis. For many ordinary investors, when they can trade through on-chain accounts, one side features volatile and cash flow-deficient crypto assets, while the other side consists of globally leading tech company stocks with real businesses, profits, and valuation systems, the latter seems more likely to gain recognition from traditional funds.

But if we extend the time dimension, people may find that this wave of U.S. stock tokenization does not pose a direct threat to the crypto industry; rather, it is more likely to be the most significant expansion for the crypto industry since DeFi Summer—indeed, it could be one of the most important events in crypto history.

Essentially, U.S. stock assets and the vast majority of crypto-native assets belong to different categories of assets. Historical data and on-chain capital flows indicate that when the categories of on-chain assets expand, there may be short-term rebalancing frictions, but in the medium to long term, capital with different risk preferences will form a complementary rather than substitutive relationship on-chain.

More critically, the prosperity of tokenized U.S. stocks heavily relies on stablecoins and the settlement layer of native public chains. Without USDC and USDT, there would be no payment tools for buying stock tokens; without Ethereum, Solana, or Base, there would be no vehicles for issuance, trading, and clearing; without DeFi protocols, holders of stock tokens would be unable to unlock their capital efficiency.

Investors may enter the on-chain world to purchase stock tokens, but a significant portion of them will gradually engage with stablecoin payments, on-chain lending, yield products, and even crypto-native assets.

"Stablecoins, tokenization of U.S. stocks, etc., once they are on-chain, will not simply lie dormant on the chain; they must become liquid, and the composability of crypto will be fully utilized. Once there is a good narrative and good projects, not only will funds from the crypto circle come in, but funds from outside the circle will also flow in; this is merely a competition in the same arena," said well-known crypto researcher Blue Fox.

According to DeFillama, the total TVL of tokenized stocks and ETFs has now exceeded $1.7 billion, making it the fastest-growing vertical in DeFi.

Recently, exchanges such as Binance, Bitget, and Gate have announced the launch of U.S. stock trading features and support for tokenization on-chain, which means that the market size for U.S. stocks will continue to expand rapidly, and its market demand has been fully validated.

More significantly, an increasing number of traditional financial giants are also accelerating their layouts. In mid-May, the U.S. Securities Depository Trust & Clearing Corporation, a global securities clearing giant, announced the integration of Chainlink to build the data and orchestration layer for its tokenized collateral platform, and later at the end of the month announced that it would launch DTC custody asset tokenization services on the Stellar network. These developments have directly stimulated the rise in related token prices and brought direct benefits to the adoption rate of infrastructure service providers in the crypto market.

Such dynamics convey an extremely clear signal: the traditional financial world has not viewed blockchain as a "competitor"; rather, it is actively embracing public chains as the infrastructure for asset clearing and settlement. The choice of DTCC is not an isolated case—JPMorgan's Onyx platform, Citigroup's tokenization services, BlackRock's BUIDL fund, and the tokenization stock plans approved by Nasdaq and the New York Stock Exchange are all pointing in the same direction: the underlying architecture of global finance is undergoing a system-level "on-chain" migration.

This has dual value for the crypto industry. On one hand, it provides the strongest endorsement for the regulatory legitimacy and market credibility of tokenized assets—when institutions like DTCC choose public chains, it is equivalent to declaring to thousands of financial institutions worldwide that "on-chain assets are trustworthy." On the other hand, the entry of these institutions directly drives the adoption rate of existing crypto infrastructure service providers, with Chainlink's data oracles, Stellar's asset issuance standards, and Ethereum's smart contract capabilities all gaining actual demand validation in this process.

II. Promoting a System-Level Upgrade of Global Financial Infrastructure

From a more macro perspective, the greatest significance of the U.S. stock tokenization boom for the crypto space may not lie in how much "new money" it can bring, but rather in its undeniable demonstration of the actual value of blockchain technology to the traditional financial world for the first time.

Over the past decade, the crypto industry has always tried to prove the importance of blockchain to the outside world, but many narratives have remained at the level of technical vision. In contrast, U.S. stock tokenization directly corresponds to the core demands of the global capital market—more efficient issuance, lower-cost circulation, more transparent settlement, and broader global accessibility. When Wall Street begins to actively embrace these capabilities, blockchain finally ceases to be just a story of the crypto industry and starts to become a foundational infrastructure upgrade that the entire financial industry participates in.

Today, tokenization is shifting from early fringe experiments driven by DeFi projects to a mainstream financial track led by large asset management institutions, custodians, exchanges, and financial market infrastructure providers. The change in leadership itself signifies that this "on-chain movement" is not a "downgrade" of a financial game, but a system-level upgrade of the underlying architecture of global finance.

As global investors begin to get accustomed to holding stocks, bonds, funds, and various real-world assets through blockchain, what the crypto industry gains will not just be a hot speculation, but a fundamental expansion of value-bearing capacity.

"Every market maturation is essentially a process of capital flowing from low-efficiency assets to high-efficiency assets. As junk coins are gradually eliminated, protocols, infrastructures, and financial products that can truly create value will have the opportunity to obtain more reasonable valuations. Tokenized U.S. stocks may not be the endpoint of the crypto market, but they are likely to be an important turning point for the crypto market's transition from a 'speculative market' to a 'capital market,'" said crypto trader @Win_Win_Bro.

Therefore, rather than viewing the tokenization of U.S. stocks as a threat to the crypto industry, it is better to see it as one of the most important milestones in the process of blockchain moving into the mainstream financial system.

The moment the $75 trillion U.S. stock market connects with crypto infrastructure—even if only achieving a 2% penetration rate—will also represent $1.5 trillion of new on-chain value. By then, no one will argue whether tokenized U.S. stocks have drained liquidity or injected unprecedented value anchoring into blockchain.