Blockchain Tokenization Reshapes Private Market Access for Retail Investors

Blockchain-based tokenization is gaining traction beyond its early focus on public equities, with increasing attention being directed toward private markets where inefficiencies are more pronounced and opportunities for financial inclusion are significant. Alex Svanevik, CEO of Nansen, argues that the real potential of tokenization lies not in digitizing existing, highly efficient public stock markets but in transforming less accessible, less transparent private asset classes [1].

Currently, private equity and early-stage investment opportunities remain largely out of reach for retail investors, with access limited to accredited investors and institutional players. This creates a scenario where a majority of investors miss out on the early growth phases of high-potential companies. For example, in the past, companies like Amazon went public at relatively low valuations, allowing widespread participation from everyday investors. Today, however, firms such as Stripe, SpaceX, and OpenAI often remain private for decades before listing, with most of the value captured by venture capitalists and hedge funds before public access is even possible [1].

The shift in capital formation has moved upstream, with companies staying private for longer and raising capital through private placements, sovereign funds, and family offices, particularly in regions outside Silicon Valley such as Europe, Asia, and the Gulf. This trend has effectively excluded the majority of investors from participating in the most dynamic sectors of the economy [1].

Tokenization has the potential to disrupt this status quo by enabling companies to offer fractionalized, programmable ownership stakes on blockchain platforms. This allows for a broader pool of global investors to participate in the growth of innovative companies without relying solely on traditional gatekeepers such as venture funds. Blockchain infrastructure can facilitate secure, transparent, and efficient transfers of these tokenized assets, reducing the cost and complexity of fundraising for startups while also providing liquidity to early employees and backers [1].

By 2025, private markets are expected to represent a $15-trillion opportunity, yet the average retail investor remains locked out due to outdated accreditation rules and disclosure requirements. Tokenization could democratize access to these markets by allowing everyday investors to participate in early-stage companies with proper oversight and transparency. While critics raise concerns about the risks associated with retail participation in private equity, Svanevik points out that similar risks already exist in public markets, particularly in speculative investments like meme stocks or crypto options [1].

The real challenge is not the risk itself but the lack of financial education that leaves many unprepared to make informed investment decisions. Tokenization, when paired with appropriate safeguards and disclosures, offers a middle ground that protects investors while expanding access. It does not simply improve existing systems by 10x, but potentially unlocks a 100x shift in financial inclusion [1].

For emerging markets, where IPO infrastructure is either limited or non-existent, tokenized private equity could provide a leapfrog solution to traditional capital market structures. This creates a two-way benefit: startups gain access to a global pool of capital, and investors gain the opportunity to participate in the growth of innovative ventures from the outset [1].

Ultimately, tokenization could redefine who gets to participate in capital formation, shifting the balance of power from a small group of gatekeepers to a more globally inclusive network of contributors. This shift is not just about faster transactions or better efficiency—it’s about redefining who shapes the economy [1].

Svanevik concludes that the future of capital formation is not about building faster trains on old tracks, but about laying entirely new rails. Tokenized private equity, if embraced correctly, could become a defining innovation of the next generation, enabling broader participation in wealth creation [1].

Source: [1] The real tokenization revolution is in private markets, not public stocks (https://coinmarketcap.com/community/articles/68a32be7c5c06c674880b3e9/)