Tokenization Redefines Private Market Access for Retail Investors

The real tokenization revolution is not happening in the realm of public stocks, but rather in private markets, where inefficiencies are more pronounced and opportunities for transformation are more substantial. According to Alex Svanevik, CEO of Nansen, while blockchain-based tokenization has garnered attention for digitizing public equities and commodities, it is in the private markets that the true potential of tokenization lies [1]. Public equities are already highly efficient, meaning the marginal gains from applying blockchain technology are relatively small. The real game-changer is in rethinking how access to capital is structured, particularly for private companies, which remain largely inaccessible to the majority of investors [1].

Currently, access to high-growth private companies is limited to accredited investors and institutions, effectively locking out retail investors from early-stage opportunities [1]. This dynamic has shifted dramatically over the past two decades, with companies like Amazon going public at much lower valuations than today’s giants such as Stripe and SpaceX, which remain private for far longer [1]. Meanwhile, global capital formation has moved upstream, with private placements and family offices playing a more dominant role over traditional IPOs [1]. This trend has created a situation where everyday investors are excluded from the most dynamic parts of the global economy [1].

Tokenization, by enabling the digital representation and secure transfer of private equity shares, could fundamentally change this landscape [1]. It allows companies to raise capital from a broader, global audience, reducing the reliance on a small pool of venture funds or high-net-worth individuals [1]. Blockchain infrastructure offers the potential to fractionalize ownership, streamline trading, and reduce the friction associated with traditional intermediaries [1]. This would not only lower the cost and complexity of fundraising but also open the door for everyday investors to participate in the growth of private companies [1].

Moreover, tokenization could provide liquidity to early employees and investors who are currently unable to sell portions of their shares until a full exit, such as an IPO [1]. The absence of such liquidity is a significant problem for many innovators who contribute to building valuable companies but are unable to benefit from their success due to illiquid ownership structures [1]. As of the end of 2025, private markets are projected to represent a $15-trillion opportunity, far exceeding the potential growth of public equities [1]. However, the majority of U.S. households—62%—are systematically excluded from participating in these markets due to outdated accreditation laws and disclosure requirements [1].

Critics argue that tokenization could expose retail investors to risks they are not prepared for, citing the illiquidity and volatility of private markets [1]. Yet, similar risks exist in public markets, where young investors trade leveraged meme stocks or crypto options without fully understanding the consequences [1]. The issue lies not in the technology itself, but in the lack of financial education, which leaves investors unprepared to navigate any market [1]. Tokenization does not eliminate the need for safeguards; in fact, it enhances transparency, which can lead to better outcomes [1]. The challenge is finding a balance between protecting investors and enabling access to high-growth opportunities [1].

Ultimately, tokenizing private equity could redefine the rules of participation in capital markets, opening up new avenues for both companies and investors [1]. Startups could tap into a broader pool of global capital, while investors could gain early exposure to innovation-stage companies that were previously reserved for venture capitalists and hedge funds [1]. For emerging economies with underdeveloped IPO infrastructure, tokenized private equity could offer a leapfrog opportunity, bypassing legacy systems entirely [1]. This shift has the potential to be one of the largest democratizations of wealth creation in history, reshaping who gets to participate in and shape the global economy [1].

Rather than merely accelerating transactions, tokenization rewires the entire system of capital formation, moving the center of gravity from a handful of gatekeepers to a global network of contributors [1]. This is not just a marginal improvement—it is a fundamental reimagining of how companies are funded and how wealth is created [1]. As Svanevik notes, the future of capital markets may depend on whether we build new rails or continue running on outdated ones [1].

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