IMF Report Finds Over Half of Tokenized Stock Trading Occurs Outside US Market Hours
More than half of trading in tokenized stocks takes place outside regular US market hours, according to findings from the International Monetary Fund (IMF) highlighted according to by Coin Bureau. The report also found that tokenized equities experience approximately 1.5 times the volatility of their traditional counterparts and are considerably less liquid, raising important questions about how these blockchain-based financial products behave compared with conventional stocks.
The findings appear in the IMF's latest Global Financial Stability Report, which examined the five most liquid tokenized US equities. The assets studied included stocks associated with Tesla, Nvidia and Google, providing a closer look at trading activity in a segment of the digital asset market that represents traditional company shares on blockchain-based platforms.
Tokenized Stocks Trade Beyond Traditional Market Hours
One of the report's key findings is that more than 50% of tokenized stock trading occurs outside US market hours. This trading pattern distinguishes tokenized equities from their traditional counterparts, which generally operate within established stock exchange schedules.
The ability to trade outside conventional market hours is a notable feature of blockchain-based representations of equities. However, the IMF's findings indicate that trading activity during these periods is an important part of the market's overall behavior. The report's observation does not, by itself, establish why traders choose to transact outside regular US trading sessions.
For investors assessing tokenized equities, the distinction between trading availability and market quality is important. Extended trading opportunities do not necessarily mean that an asset can be bought or sold easily at a desired price. The IMF's separate findings on liquidity highlight this distinction.
Most Trades Involve Less Than One Share
The IMF report also found that approximately 80% of trades in the tokenized US equities studied involved less than one share. The figure suggests that sub-share transactions account for a substantial proportion of observed trading activity in this market segment.
Fractional exposure allows transactions to involve less than a complete share of an underlying stock. In the context of tokenized equities, the IMF's finding provides a measure of how trading is distributed by transaction size. However, the reported 80% figure refers to the proportion of trades, not necessarily the proportion of total trading value or the number of unique investors.
The distinction matters when interpreting market activity. A high number of small transactions does not automatically indicate that a market has substantial overall liquidity or that large orders can be executed without significant price effects.
Higher Volatility and Lower Liquidity
Beyond trading hours and transaction sizes, the report identified two important differences between tokenized stocks and their traditional versions. Tokenized equities showed approximately 1.5 times the volatility of the corresponding conventional assets and were considerably less liquid.
Higher volatility means that prices fluctuate more substantially over the period or under the measurement used in the report. Lower liquidity, meanwhile, can make it more difficult to execute transactions efficiently. Depending on market conditions, limited liquidity can also contribute to wider differences between buying and selling prices and greater price effects from individual orders.
These findings describe the behavior observed in the tokenized equities examined by the IMF. They should not automatically be generalized to every tokenized stock or trading platform, because the study focused on the five most liquid tokenized US equities rather than the entire market.
Tokenized Stocks Remain a Small Market
Despite the attention surrounding blockchain-based financial products, tokenized stocks remain relatively small, with a reported market size of approximately $2.3 billion. By comparison, the wider tokenized real-world asset market stands at approximately $65 billion.
The figures place tokenized equities within the broader real-world asset tokenization sector, which encompasses blockchain-based representations of assets beyond stocks. The two market-size figures also show that tokenized stocks account for a limited portion of the wider tokenized asset landscape.
Coin Bureau highlighted the IMF's findings on trading outside US market hours, small transaction sizes, volatility and liquidity. The report's figures provide a snapshot of a developing market in which tokenized stocks remain substantially smaller than the broader tokenized real-world asset sector.
Writer: Victoria HaleTechnology & Blockchain WriterVictoria Hale writes about blockchain technology, digital infrastructure, and the intersection of emerging technologies with finance. Her articles explore how new protocols and systems are shaping the evolving digital economy.She prioritises clarity and accuracy when explaining technical developments to a general audience.
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