The tokenized equities market is poised for exponential growth in the coming years, with projections suggesting it could reach nearly $190 trillion within the next two decades. This forecast comes from Galaxy Research, which recently made headlines for tokenizing its stock on the Solana blockchain through Superstate, a platform specializing in compliant tokenization infrastructure.
Alex Thorn, Galaxy’s Head of Research, emphasized the significance of this move, stating that token holders now have ownership of common equity in Galaxy, similar to traditional stockholders. This groundbreaking initiative has seen 32,374 Galaxy Class A shares issued on Solana, held by 21 token holders, according to data from Dune Analytics.
Galaxy’s decision to tokenize its stock showcases its belief in the potential of tokenization and serves as a blueprint for other listed companies to enhance market accessibility. The firm has modeled various scenarios to demonstrate how blockchain adoption could reshape financial markets once decentralized trading gains widespread acceptance.
Describing the tipping point as a “Uniswap moment,” Galaxy envisions a future where on-chain trading is perceived as fairer, faster, cheaper, and safer than traditional structures. As decentralized platforms gain traction, centralized exchanges are expected to gradually lose market share.
In the short term, Galaxy predicts that tokenized equities could represent between 0.7% and 4.6% of US market capitalization within the first two years of adoption, amounting to $0.5 trillion to $3.3 trillion. In a bullish 10-year scenario, tokenized shares could capture 40% of the market, translating to almost $50 trillion.
Looking further ahead, the forecasts diverge significantly over two decades. In a bear case scenario, tokenization could reach 12% of the US equity market, equivalent to $29.5 trillion. Conversely, a bull case scenario envisions as much as 78% penetration, totaling an estimated $189.9 trillion.
Galaxy also anticipates a transformation in trading activities, with tokenized equities potentially accounting for 93% of all US equity trading volume in the most optimistic scenario. This shift would have far-reaching implications for liquidity, settlement times, and investor access.
Overall, Galaxy’s foray into tokenized equities exemplifies the growing trend towards blockchain-based financial instruments and sets the stage for a dynamic evolution in the way assets are bought, sold, and traded in the future.