Bittrex Offers Tokenized Stocks

[Darker45]

Bittrex traders can now trade tokenized stocks of listed companies such as Amazon (AMZN), Tesla (TSLA), Apple (AAPL), Netflix (NFLX), Pfizer (PFE), Google (GOOGL), Facebook (FB), and more.^[1]

While it is not really "actual company shares" which is listed on the exchange, such tokens are "backed 1:1 to traditional stocks, entitling holders to the same economic benefits of owning the underlying stock."^[2]

Although Bittrex is not the first crypto exchange which bridged the traditional market and the crypto market, it certainly signals a time when both markets are merging for the sake of traders and investors. On the other side of the fence, there are already stock exchanges which have also made initiatives from their end to connect the two markets.^[3]

Personally, this is a welcome development. Gone are the days when the relationship between markets is characterized with enmity and one market is trying discredit the other. And it seems the entry of crypto exchanges into the game of stocks provides some advantages to traders and investors alike who used to have no access to such market, for example, or have to pay exorbitant fees to brokers.

Does this emerging trend appeal to you, too?


[1] https://global.bittrex.com/discover/tokenized-stocks
[2] https://www.coindesk.com/crypto-exchange-bittrex-lists-tokenized-apple-amazon-tesla-stocks-for-trading
[3] https://cointelegraph.com/news/vienna-and-singapore-stock-exchanges-embrace-bitcoin-and-ethereum

[joniboini]

While it is not really "actual company shares" which is listed on the exchange, such tokens are "backed 1:1 to traditional stocks, entitling holders to the same economic benefits of owning the underlying stock."^[2]

I think this is really difficult to prove and trust. Say, a user bought $1000 of Tesla stock today, does that mean Bittrex and DigitalAssets.Ag which claims to hold the shares to back the token really own it that day? To be fair, this is the problem on nearly all of tokenized stocks, so that's that.

If anyone is interested, better treat it as an experiment only. Don't put all of your money there.

[TheUltraElite]

Only if the exchange offering such a service would be available for the country where I would be residing at that time. Like I can trade stocks and shares of companies based on my country already and I do wish to buy stocks of companies based on other countries - traditional fiat based system for this is very costly and therefore less feasible for the average Joe.

Now if we see crypto being used as middle-ware for such trades this might bring in some new blood into the picture and greater usage of the same.

However only time will tell how they care of disputes and problems associated with such an exchange system. Currently they are going for the biggest names in the American market but not the ones of the Dow-Jones Industrial Average. This might improve in future.

Also these token-stocks are not like owning real stocks. The corporate actions section of the FAQ is telling us about them and that people will get dividends for them.

My guess would be that bittrex is having a representative account to make all these trades for its users from the Fiat Stock exchange and lock them up as tokens for the user.

Definitely would like to see how this unfolds.

[Darker45]

While it is not really "actual company shares" which is listed on the exchange, such tokens are "backed 1:1 to traditional stocks, entitling holders to the same economic benefits of owning the underlying stock."^[2]

I think this is really difficult to prove and trust. Say, a user bought $1000 of Tesla stock today, does that mean Bittrex and DigitalAssets.Ag which claims to hold the shares to back the token really own it that day? To be fair, this is the problem on nearly all of tokenized stocks, so that's that.

There is indeed a trust issue in this, yes, but couldn't it be more or less sufficiently addressed by legal licenses, regular audits, and so forth?

This is the same issue, for example, with buying gold and receiving nothing in return but mere numbers which are agreed to be reflecting a certain amount of real gold safely kept somewhere. Or, using a more recent example, with Paypal's Bitcoin. I mean users will have to trust that the numbers reflecting on their digital portfolio or wallet are truly representing a certain amount of Bitcoin kept somewhere safe.

[magneto]

Bittrex traders can now trade tokenized stocks of listed companies such as Amazon (AMZN), Tesla (TSLA), Apple (AAPL), Netflix (NFLX), Pfizer (PFE), Google (GOOGL), Facebook (FB), and more.[1]

While it is not really "actual company shares" which is listed on the exchange, such tokens are "backed 1:1 to traditional stocks, entitling holders to the same economic benefits of owning the underlying stock."[2]

There is no timely, provable way of guaranteeing this 1:1 backing. That is the main concern.

Also, it seems like that this is really no different to CFD contracts that are offered by eToro and other trading platforms - they are not the actual asset itself but a derivative that will give you exposure to the underlying asset. Obviously, this could be great for some people but the counterparty risks are too immense for any long term investors to seriously tap into this field.

Although Bittrex is not the first crypto exchange which bridged the traditional market and the crypto market, it certainly signals a time when both markets are merging for the sake of traders and investors.

This is something that I have speculated for a long time. The merging of equity/bond and crypto exchanges will be inevitable, given the fact that the primary exchanges for these traditional fiat instruments are relatively inaccessible for retail investors.