US Firms and ETFs Dominate Tokenized Stock Market with 91.8% Share

According to data from Token Terminal, US firms and exchange-traded funds (ETFs) account for an overwhelming 91.8% of the $4.64 billion tokenized stock market. This dominance highlights the preferences of buyers in this market and reflects the origins of the products being offered.

Tokenized stocks are digital tokens that represent traditional equities or ETFs, functioning as claims to shares held in a brokerage account. While the tokens exist on a blockchain, the actual shares are managed by custodians. The total market capitalization for tokenized stocks is estimated to be between $4.5 billion and $4.63 billion as of late October 2026, with approximately 93% of this value linked to US-listed stocks and ETFs.

ETFs play a significant role in this market, constituting more than 20% of the underlying assets. The growth of the tokenized stock market has been rapid, surpassing $3 billion and then $4 billion in October 2026, with some segments experiencing growth rates of around eight times year over year.

Beyond mere holding, the usage of tokenized stocks is expanding. Total deposits in decentralized finance (DeFi) related to this sector have approached $300 million, and the number of holders of tokenized stocks is reported to be in the millions.

Interestingly, while the underlying assets are predominantly American, the issuance of these products is largely conducted by non-US entities. Approximately 90% of tokenized stock issuance and market capitalization comes from offshore issuers. Leading the market are three major players: bStocks, linked to Binance, with an estimated market share of 32%; Ondo Finance at around 29%; and Backed Finance’s xStocks, holding about 24%. Together, these three companies dominate the sector.

US Broker-Dealer's Role in Tokenized Stock Custody

Despite the offshore issuance, a US-based broker-dealer, Alpaca, is responsible for custodizing an estimated 83% to 94% of the underlying shares for tokenized stocks. This creates a unique dynamic where American companies provide the assets, offshore issuers create the tokens, and a single American broker-dealer manages the majority of the actual shares.

While the growth of the tokenized stock market is notable, it is essential to consider the traditional equities market, which is valued at approximately $150 trillion. This comparison underscores the concentration risks present in the tokenized market, where a few issuers dominate supply and a single custodian holds most of the underlying shares.

Future Outlook for Tokenized Stocks and Regulatory Challenges

The regulatory implications of this structure are significant, as US assets are packaged by non-US issuers to provide equity exposure to users who may lack access to US brokerages. The high percentage of US firms and ETFs in the tokenized market reflects a clear preference among global crypto users for American equities.

Looking ahead, key questions remain regarding the market's future. Will the market share continue to be concentrated among the leading issuers, or will new players emerge? Will custody of the underlying shares diversify beyond Alpaca? And will the US share of the market maintain its dominance as the sector evolves?