Wall Street Embracing 24/7 Trading As Tokenization Gains Momentum

Wall Street is undergoing a significant transformation as traditional financial systems give way to decentralized, blockchain-based technologies. This shift is not merely an evolution but a complete re-architecture of the global financial landscape. The transition from physical trading floors to digital token pools and from paper contracts to smart contracts signifies a new era of financial democratization.

The stock market, with its roots tracing back over 400 years, has evolved from smoke-filled coffee houses in Amsterdam to the electronic trading platforms of today. However, the traditional stock market operates within fixed hours, with the US market running from 9:30 am to 4:00 pm, while institutions enjoy extended access from 4:00 am to 8:00 pm. This disparity creates an imbalance, favoring institutional investors over retail participants. The introduction of extended trading hours by platforms like Robinhood has provided some relief, but the system still lags behind the 24/7 nature of the crypto market.

Fixed trading hours lead to peculiar market distortions, such as the "night effect," where buying stocks at the market close and selling them at the open has historically yielded significant returns. This phenomenon highlights the inefficiencies and exclusivity of traditional markets, where retail investors are often left on the sidelines while institutional capital drives market movements. The advent of tokenized and crypto-native markets, which operate fluidly around the clock, promises to level the playing field by providing inclusive market access.

In response to global demand, traditional stock exchanges are beginning to adapt. The New York Stock Exchange (NYSE) has announced plans to extend trading hours to 22 hours on weekdays, while the Nasdaq exchange is moving towards 24-hour trading. This shift is driven by the increasing demand for US equities, with over 56 products tracking the Nasdaq-100 launched within five years, predominantly outside the United States. The message is clear: embrace disruption or risk becoming obsolete.

Tokenization represents a significant step towards market democratization. By converting real-world stocks and ETFs into blockchain-based tokens, markets can operate 24/7, with real-time price reactions to news events. This eliminates asymmetric information and creates a hyper-efficient market. Kraken's recent announcement to offer tokenized stocks to non-US clients, backed 1:1 by actual shares, exemplifies this trend. Tokenized equity can be integrated into decentralized applications (DApps), revolutionizing yield-bearing collateral and lending, and paving the way for borderless, permissionless markets.

BlackRock's CEO, Larry Fink, underscores the transformative potential of tokenization. He envisions a future where every asset can be tokenized, leading to markets that never close and transactions that clear in seconds. This would unlock billions of dollars currently immobilized by settlement delays, reinvesting them immediately back into the economy and driving growth. The values that underpinned the founding of stock markets—inclusion, pooling of resources, and shared prosperity—are reaffirmed by crypto's new upgrade, scaling the ecosystem in unprecedented ways.

This transformation marks an inflection point in global capital markets, heralding a new era of decentralization and inclusivity. While the journey is still in its early stages, the shift towards tokenized, 24/7 markets is inevitable. The future of finance is decentralized, and Wall Street is waking up to this reality.