Tokenized stocks: Binance soars and relegates Kraken to 3rd place

Binance just took second place in the tokenized stock market by value. Launched on June 11, bStocks has approximately $610.6 million, compared to $601.2 million for Kraken’s xStocks. It took less than two months to reverse the ranking. Ondo Finance remains ahead of both platforms.

Binance passes Kraken in less than two months

Binance’s return to tokenized stocks had been expected since the start of the year. The platform was already preparing its return to this market five years after its first attempt. This time, the start is quick.

By August 3, bStocks had reached approximately $624 million in value, compared to $579 million for xStocks. Ondo Finance remained well ahead with around 927 million. As of Tuesday, the gap between Binance and Kraken had narrowed: 610.6 million for bStocks and 601.2 million for xStocks.

Second place is therefore less than $10 million. Nothing insurmountable for Kraken.

All that remains is speed. Binance launched bStocks on June 11 to provide access to US stocks via blockchain tokens. The user gains exposure to the security without directly owning the underlying stock. Changpeng Zhao attributes the product’s progress in particular to the size of Binance’s user base.

The platform does indeed have an obvious advantage. Indeed, she does not need to build her audience from scratch. Each new product can be offered to a mass of traders already present in its ecosystem. For Kraken, the competition is therefore becoming more serious than a few weeks ago.

Tokenized stocks are growing very quickly

The battle between Binance and Kraken is taking place in a market that has completely changed in size.

A year ago, xStocks dominated with just $40.7 million. Robinhood followed with 37.2 million. Ondo then represented around $65,000 according to the data. Today, the total value tracked by Token Terminal is around $2.7 billion, compared to around $80 million a year earlier.

Transfers are also speeding up. In July, tokenized stocks had already recorded $8.41 billion in monthly transfers, an increase of 105% in thirty days. The distributed value of the sector then reached $2.16 billion. We understand better why exchanges are jostling.

A tokenized action makes it possible to purchase fractions of securities and transfer them to the blockchain. Depending on the structure of the product, it may also circulate outside traditional stock exchange hours. On the other hand, buying the token does not automatically mean becoming a shareholder of the company concerned.

This is a pretty important nuance. Rights to dividends, voting or reimbursement may vary depending on the issuer and the legal structure chosen. Current success therefore depends as much on distribution as on technology. Binance has just shown what a huge user base can do.

Ondo still remains ahead of Binance

The first place has not changed. Ondo Finance maintains a comfortable lead and remains the main player followed by Token Terminal.

Binance has therefore not yet taken control of the market. And Kraken only lost its second place by a few million dollars. The ranking can still move quickly.

There is still a funny contrast. In 2021, Binance abandoned its first tokenized shares after a few months, amid regulatory pressures in Europe. Five years later, the exchange returns and already finds itself second.

The sector itself no longer has much in common with that of 2021. Crypto exchanges, fintechs and several financial institutions are now working on tradable securities on blockchain. Even traditional stock exchange infrastructures are experimenting with tokenization.

CZ also takes this idea much further. He recently called on states to directly tokenize their stock markets to expand their access to international investors. For Binance, bStocks already offers a first glimpse of this ambition. Two months were enough to overtake Kraken. Now that leaves Ondo, with a few hundred million dollars in advance. The next battle is ready.