Some cryptocurrency platforms offer users to invest in so-called tokenized shares of existing companies. However, such assets have a number ...
Some cryptocurrency platforms offer users to invest in so-called tokenized shares of existing companies. However, such assets have a number of differences compared to traditional securities that are traded on stock markets, writes RBC-Crypto.
Experts explained what is the advantage of tokenized shares and how you can earn money with them.
An investor who buys ordinary securities on a broker's website or using a mobile application may think that these shares are already in digital format because he does not get them physically in his hands, said Maxim Krupyshev, CEO of the Coinspaid crypto exchange. But in fact, securities do not differ much from what they were a hundred or two hundred years ago, since this is some kind of electronic paper that is stored in a depository, and he, in turn, keeps records of rights to securities in electronic format, the expert explained. ... Krupyshev argues that tokenized shares minimize the role of the depositary, reducing its responsibilities to the storage of security real shares.
What is the advantage of tokens?
One of the main advantages of tokenized shares is that they allow you to buy fractional parts of securities, explained Andrey Podolyan, CEO of the crypto exchange Cryptorg. exchange. As an example, he cited a share of the cryptocurrency exchange Coinbase, which today costs $ 333. On April 14, cryptocurrency exchange Coinbase conducted a direct listing of shares on the NASDAQ stock exchange. The very next day, the tokenized share of the site appeared on another crypto exchange - Binance. The asset is traded in a pair with the BUSD stable coin.
According to Podolyan, in traditional financial markets, investors do not have the opportunity to buy part of this share, and its tokenized version allows you to purchase a fractional part of security for $ 10, $ 20, or any other amount.
Trading in tokenized shares is much faster and more technologically advanced thanks to the use of blockchain, explained Janis Kivkulis, the lead strategist at EXANTE. Another advantage that investors can enjoy is that there is no need for a brokerage account to buy a share, added Maxim Krupyshev.
“Tokenized shares are reminiscent of ETFs, which are usually inexpensive and available to any retail investor. But if the ETF assumes a set of securities within the fund and a higher commission, then tokenized shares allow you to buy exactly what you want, ”explained the CEO of the Coinspaid crypto exchange.
How to trade tokenized shares
The purchase of a tokenized share takes place on a crypto-exchange in the same way as the purchase of any other crypto asset, explained Janis Kivkulis. According to him, such tokens can be traded in the same way as real stocks, earning on the difference in rates when selling and buying.
When trading tokenized shares, it is necessary to follow the principle of diversification, monitor the financial disclosure of information of the issuing company, and the situation on world stock markets, Maxim Krupyshev recommends.