Connect with us

Digital Assets

Tokenized Stocks from Apple, Tesla, and Amazon now available through Bittrex Global

mm

Updated

 on

Securities.io is committed to rigorous editorial standards. We may receive compensation when you click on links to products we review. Please view our affiliate disclosure. Trading involves risk which may result in the loss of capital.

tokenized

Have you ever wanted to own stock in companies like Facebook, Google, or even Netflix, but do not have access to such assets?  This is about to change for a large portion of Bittrex Global clients, as the United States based digital asset exchange has just made an interesting announcement – It now supports and offers ‘tokenized stocks’.

A tokenized stock is not a security – rather, it is a derivative in the form of a token which is tethered or ‘pegged’ to an underlying asset.  Rather than being pegged to FIAT, like a stablecoin, these tokens are pegged to a publicly listed stock.

To achieve this support, Bittrex Global will be working hand-in-hand with DigitalAssetsAG.  In a simplified process, this would work as follows,

  1. DigitalAssetsAG buys shares of stock in a company, designating them for tokenization
  2. Purchased stocks are custodied by a licensed bank
  3. Bittrex generates digital tokens on a 1:1 for each share, representing a collateralized derivative contract
  4. Investors purchase tokens, gaining exposure to company stock indirectly

Supported Assets

Bittrex Global has noted that moving forward, it will continue working to expand on both the functionality of its tokenized stock services, as well as supported assets.  For the time being, the following companies are those which investors can gain exposure to through use of this new service.

  • Amazon
  • Alibaba
  • Apple
  • Beyond Meat Inc.
  • Bilibili
  • BioNTech
  • Facebook
  • Google
  • Netflix
  • Pfizer
  • SPDR S&P 500 ETF

If the idea of these tokenized stocks is intriguing to you, make sure to sign up at Bittrex Global.

Perks Offered

Now that we know what tokenized stocks are, and which are on offer, why are they important?  These assets offer various perks/benefits to investors, with the following being a few key examples.

Geographical Limitation

Investors around the world often have their opportunities restricted to assets traded within their own nation.  An investor residing outside of the United States will typically find it difficult to gain exposure to U.S. based companies such as Apple, Tesla, and Amazon.  By utilizing tokenized stocks, this issue is eliminated, as the investor is simply buying a derivative – while the actual stock is purchased by an eligible entity.

This perk is particularly useful for investors looking to gain access to international STOs in a legal manner.  These events themselves have seen restricted growth, due to a limited investor pool.  By giving investors the opportunity to purchase tokenized stock, this investor pool instantly grows to encompass a nearly global audience – potentially jumpstarting the digital securities sector.

Fees

By gaining exposure to a company through a tokenized stock, investors can avoid sometimes hefty fees, as the use of a broker is not required.

Timely Access

Stocks such as Apple, Tesla, and Amazon are listed on traditional stock exchanges.  This means that in order to trade these assets, investors must do so within normal trading hours.  By purchasing a tokenized stock, investors can buy/sell at any time, regardless of whether traditional markets are open.

Not Digital Securities

With terminology like digital securities, security tokens, tokenized securities, and now tokenized stock, it is easy to get overwhelmed and confused.  While we won’t go in to the intricacies of what differentiates each of these asset types, it is important to note that tokenized stocks are not a security.  Rather, they represent a derivative contract which is collateralized by a security.  As they are created and pegged to these securities on a 1:1 basis, a tokenized security will directly mimic market activity of its underlying security.

Legal Woes

Offering tokenized stocks marks a big change for Bittrex.  The decision to offer these derivatives is a positive sign of platform expansion, after a period of consolidation throughout 2019 and 2020.

During this time period, Bittrex dealt with various legal issues, which resulted in the company restricting services to traders residing in 31 countries around the world.  It also led to the rise of Bittrex Global, a variant of the platform geared specifically for those outside of the United States, and the exchange through which these tokenized stocks are on offer.

First Up?

While the idea of tokenized stocks may sound fresh and intriguing, Bittrex Global is by no means the first company to attempt supporting them.

Over two years ago, DX.Exchange launched out of Estonia, with high hopes of establishing a respected exchange hosting a variety of digital assets.  At the time, the company caught the attention of many, as it was one of the first exchanges to announce support for tokenized stocks like Apple, Tesla, Amazon, and more.  While the idea was intriguing, the exchange was plagued with problems, and eventually went bankrupt barely over a year into its lifecycle.

Joshua Stoner is a multi-faceted working professional. He has a great interest in the revolutionary 'blockchain' technology. In addition to this, he is a licenced Paramedic in Nova Scotia, Canada. As such, he can provide emergency care/medicine to any situation necessitating it.

Advertiser Disclosure: Securities.io is committed to rigorous editorial standards to provide our readers with accurate reviews and ratings. We may receive compensation when you click on links to products we reviewed.

ESMA: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 74-89% of retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

Investment advice disclaimer: The information contained on this website is provided for educational purposes, and does not constitute investment advice.

Trading Risk Disclaimer: There is a very high degree of risk involved in trading securities. Trading in any type of financial product including forex, CFDs, stocks, and cryptocurrencies.

This risk is higher with Cryptocurrencies due to markets being decentralized and non-regulated. You should be aware that you may lose a significant portion of your portfolio.

Securities.io is not a registered broker, analyst, or investment advisor.