Cryptocurrency exchange Bittrex has announced the listing of tokenized shares in collaboration with the DigitalAssets.AG platform.
The trading platform will allow traders and investors to capitalize on the price movement of traditional securities using their digital counterparts. Thus, the clients of the exchange do not have to pay additional commissions and cooperate with brokers. In addition, the entire investment process will be much faster.
Tokenized Shares are a newer derivative financial instrument that is traditional securities in the form of shares of publicly traded firms, added to regulated crypto exchanges. Previously, there was no such product, but progress in displaying the value of a digital token has opened the way for innovation in this area.
Digital Securities on Bittrex
The news was commented on by Bittrex CEO Tom Albright. Here is his remark in which he shared his impressions. The statement is quoted by Decrypt.
Blockchain technology has the potential to radically expand access to financial services, and Bittrex Global is very proud to provide people with a portal to build their capital and personal wealth in ways that were unimaginable a decade ago.
Indeed, thanks to this product, access to the world of investments is indeed becoming much wider. Still, not everyone has the opportunity to invest in American companies, but if there is no opportunity in the country to make such an investment, intermediaries are involved in the scheme, which noticeably affects the commissions. In this case, all of this can be avoided. And since the prices of tokenized shares will be pegged to the usual ones, investors will definitely not feel the difference in terms of profitability.
According to the official press release of the exchange, it will add support for twelve popular stocks at once, including the securities of Tesla, Google, Facebook and the SPY ETF, which includes the 500 most popular US companies. Shares can be purchased with USD, Tether, or Bitcoin.
At the same time, trading in tokenized securities will be open around the clock, which differs from the rules of the usual stock market.
Bittrex’s decision will push traditional investors to explore blockchain, while crypto enthusiasts will be interested in the stock market at the same time.
As in the case of cryptocurrencies, investors will be able to purchase shares of tokenized shares: the minimum investment amount will be $ 10. However, representatives of the trading platform noted that market liquidity – that is, the number of buyers and sellers trading an asset at a particular time – can vary depending on the time of day. And this is also worth paying attention to, because this feature can affect the purchase or sale price of an asset with low supply and demand.
We checked the actual data: Tesla shares in 2020 are up 7.45 times as of today. And this is noticeably more than the results of the growth of Bitcoin, which, even taking into account the March fall to $ 5 thousand, did not grow more than fourfold. Accordingly, the desire to contact tokenized shares of American companies can be more than justified.
A positive picture is also observed in the case of Apple. On January 1, the company’s shares were valued at $ 75, while today the value is $ 123. Accordingly, we are talking about 64% growth. This is far from 290 percent of Ethereum’s growth over the past year, but the numbers are good too.
Tokenized traditional assets are a great way to show the whole world that the use of blockchain in finance, including, can bring a lot of benefits even for those investors who prefer to trade only in stocks. Hopefully, the launch of trading on Bittrex will provide an example and push for innovation for other exchanges.
Well, awareness of the benefits of blockchain will also make cryptocurrencies more valuable in the eyes of investors who also want to connect with this type of asset.