By cryptoadmin Wall Street's move into blockchain technology could open a vast new market for crypto, but investors betting on tokenization may find better opportunities than bitcoin $BTC$81,679.10 and ether $ETH$2,460.49, according to the well-followed research firm Citrini Research.
In a 79-page report titled Breaking the Wall, published Thursday, the research firm argued that bringing stocks, bonds and other financial assets onto blockchains could create new businesses in trading, lending and payments.
Tokenization turns traditional assets into digital tokens that can move between financial platforms and potentially trade around the clock. A tokenized stock, for example, could serve as collateral for a loan directly from an investor's digital wallet, without going through a traditional brokerage.
Citrini is best known for its research on technology and markets, including artificial intelligence, and for running the most-followed Substack newsletter, with more than 263,000 followers. The firm’s research on AI went viral earlier this year, sparking widespread fear and leading to a brief market meltdown.
The research argued that flexibility opens new markets for trading platforms, lenders, stablecoin issuers and companies that handle securities ownership records. And the biggest winners may be the companies and crypto projects collecting fees from all that activity, the report said.
“We can't assume that majors, primarily $BTC and $ETH, will make new ATHs on this,” the report said, referring to all-time highs. “Even if they do, there are better expressions.”
Stock picks for playing tokenization
To identify opportunities, Citrini proposed two investment baskets, one focused on publicly traded stocks and another on crypto tokens.
The report was particularly interested in businesses that stand to earn fees as more of Wall Street moves onchain.
It highlighted tokenization firm Securitize (SECZ), which maintains the legal link between blockchain tokens and the securities they represent.
Crypto exchange Coinbase COIN$174.87 and digital brokerage Robinhood HOOD$107.87 offer exposure through their trading platforms and blockchain infrastructure, while stablecoin issuer Circle CRCL$80.71 could benefit from greater demand for its USDC stablecoin to settle transactions, the report said.
Citrini also mentioned Figure Technology Solutions (FIGR) for tokenized lending, SoFi SOFI$15.55 for stablecoin payments, and institutionally focused digital asset exchange operator Bullish BLSH$31.49, CoinDesk’s parent company, which is acquiring share registrar Equiniti.
Crypto tokens benefitting from tokenization
Citrini said it was "actually more excited" about its separate crypto-token basket, which it said offers broader exposure than the limited universe of listed companies.