Tokenized Equities 1.5 Times More Volatile Than Public Markets, IMF Says — Market Talk
Tokenized equity markets--which convert real-world assets into digital tokens--are far less liquid and about 1.5 times more volatile than traditional markets, especially on decentralized exchanges, according to the IMF's latest global financial stability report. "Part of this gap reflects that tokenized venues are less liquid and trade continuously, so their volatility captures price movements during lower-volume overnight and weekend periods," the researchers say. Despite the volatility, distributions of price differences are close to zero, indicating that tokenized prices tend to track their underlying equities closely. The IMF estimates the public market for the tokenized real-world assets has reached over $65 billion. ([email protected])