New York, May 2025: A fundamental mismatch in market hours between traditional finance and the cryptocurrency world is creating a persistent liquidity problem for one of the most promising innovations in finance: tokenized stocks. According to Ian de Bode, CEO of ONDO Finance, the adoption of 24-hour trading by major exchanges like the New York Stock Exchange (NYSE) and Nasdaq could be the key solution. This proposal highlights a critical friction point as the worlds of blockchain-based assets and conventional securities increasingly converge. The core issue is simple yet profound: while crypto markets never sleep, their traditional counterparts still take weekends off, leaving tokenized versions of blue-chip stocks in a liquidity vacuum.
Tokenized Stock Liquidity Faces a Weekend Cliff
The concept of tokenizing stocks—representing ownership in a company like Apple or Tesla as a digital token on a blockchain—has gained significant traction. Proponents argue it enables fractional ownership, faster settlement, and global accessibility. However, the practical experience for traders and market makers reveals a stark limitation. “When the underlying traditional market closes on Friday afternoon, liquidity for its tokenized version essentially evaporates until Monday morning,” explains a market structure analyst who requested anonymity due to client relationships. This creates a dangerous scenario where the price of a tokenized Tesla share on a decentralized platform could drift significantly from its Nasdaq-listed counterpart, based on thin, weekend-only crypto market sentiment, not company fundamentals.
This disconnect isn’t merely an inconvenience. It introduces substantial risk. For institutional players considering tokenized assets as a legitimate component of a portfolio, the inability to hedge or trade positions when the primary market is closed is a major deterrent. The liquidity dries up because the primary price discovery mechanism—the NYSE or Nasdaq—is inactive. Market makers, who provide the essential buy and sell orders that create a fluid market, find their job nearly impossible over the weekend. They cannot efficiently source the underlying asset or hedge their exposure in the traditional venue, forcing them to widen spreads or withdraw liquidity entirely, which exacerbates the problem.
The 24-Hour Trading Proposal and Its Precedents
The call for 24-hour trading in traditional equities is not new, but the rise of tokenization adds a powerful new argument. Extended-hours sessions already exist for major indices and some ETFs, but they are limited and often illiquid. A full, seamless 24-hour cycle for flagship stocks would represent a seismic shift. “The technology to support continuous, global trading has existed for decades,” notes Dr. Evelyn Reed, a financial historian. “The barriers have been operational and cultural—settlement cycles, staffing, and the entrenched rhythm of the financial week.” The move would align traditional finance with the “always-on” global economy and, critically, with the digital asset ecosystems building around it.
Several models could be employed. One is a fully automated electronic session from 4 p.m. to 9:30 a.m. ET, with limited human oversight, much like forex markets operate. Another is a partnership model where global exchanges in different time zones provide continuous listing for the same security. The table below outlines the core differences between the current state and a potential 24-hour model for a tokenized stock.
| Aspect | Current Fragmented Model | Potential 24-Hour Integrated Model |
|---|---|---|
| Price Discovery | Weekdays: NYSE/Nasdaq. Weekends: Isolated crypto markets. | Continuous, unified price discovery across all venues. |
| Liquidity | Deep on weekdays, very thin or absent on weekends. | Consistently available, though potentially variable in depth. |
| Hedging Ability | Impossible for market makers when primary market is closed. | Consistently possible, enabling tighter spreads and lower risk. |
| Investor Access | Global but inconsistent; Asian investors face closed markets during their day. | Truly global and equitable access for all time zones. |
Beyond Liquidity: Implications for Market Structure and Regulation
The push for 24-hour trading driven by tokenization has broader implications. It forces a re-examination of what a “market day” means in a digital world. Regulatory frameworks, from the Securities and Exchange Commission (SEC) to global bodies, are built around discrete trading sessions. Continuous operation would require updates to rules concerning disclosures, halts, and volatility controls. “A company could release material news at 8 p.m. on a Sunday. How does that get incorporated fairly in a 24-hour market?” asks Michael Torres, a former exchange compliance officer. “The entire infrastructure of corporate communication and investor relations would need to evolve.”
Furthermore, it challenges the business models of traditional exchanges and data providers. Their revenue is tied to specific hours and data feeds. A move to 24-hour trading could accelerate the shift toward fully electronic, cloud-native exchange infrastructure, reducing reliance on physical trading floors and legacy systems. This technological evolution, while costly upfront, could lower long-term operational costs and increase resilience.
The Path Forward and Industry Resistance
While the logic from a tokenization perspective is clear, the path to 24-hour trading is fraught with obstacles. The traditional financial industry is a complex web of interdependent players:
- Broker-Dealers & Custodians: Their operations, settlement, and staffing are calibrated to current hours.
- Public Companies: Many may resist the pressure of being “always on” for investors.
- Exchange Employees: Labor unions and workforce management present significant logistical hurdles.
- Incumbent Interests: Some profit from the current fragmentation and may oppose harmonization.
Change will likely be incremental. The most plausible first step is a significant expansion of overnight electronic trading hours for a select basket of highly liquid, multinational companies—precisely the ones most likely to be tokenized. Success there could build the case for a broader rollout. The driving force, as Ian de Bode of ONDO suggests, may come from outside. The competitive pressure from decentralized finance (DeFi) and global crypto exchanges, which already offer 24/7 trading for crypto-assets and synthetic stocks, could force traditional venues to adapt or risk ceding relevance to a new financial paradigm.
Conclusion
The liquidity challenge for tokenized stocks is a direct symptom of the collision between two financial eras. The proposal for 24-hour trading on the NYSE and Nasdaq is more than a technical fix; it is a necessary evolution for traditional finance to remain integrated and authoritative in a world of digital assets. Solving the tokenized stock liquidity issue is not just about helping a niche crypto product—it is about future-proofing the core infrastructure of global capital markets for a non-stop, digitally-native future. The market’s ability to provide continuous price discovery and risk management will ultimately determine how deeply and safely tokenization integrates into the mainstream financial system.
FAQs
Q1: What are tokenized stocks?
Tokenized stocks are digital representations of traditional company shares issued on a blockchain. They aim to mirror the economics of the underlying stock, offering potential benefits like 24/7 trading, fractional ownership, and faster settlement, but they are distinct from the official shares listed on exchanges like the NYSE.
Q2: Why is liquidity a problem for them on weekends?
Liquidity dries up because the primary market for the actual stock (e.g., Nasdaq) is closed. Market makers cannot hedge their positions or source the underlying asset, so they withdraw, making it hard to buy or sell the tokenized version without large price swings.
Q3: Has 24-hour trading been tried in traditional markets before?
Yes, in limited forms. Major index futures and forex trade nearly 24 hours. Some exchanges have offered extended-hours sessions for equities, but participation and liquidity have traditionally been low, as the core institutional market operated on standard hours.
Q4: Would 24-hour trading only benefit crypto investors?
No. It would benefit global investors in all time zones, allow companies to respond to after-hours news more efficiently, and modernize market infrastructure. The push from tokenization is simply highlighting an existing inefficiency in the global system.
Q5: What is the biggest barrier to implementing 24-hour stock trading?
The biggest barriers are operational and cultural, not technological. It requires overhauling the workflows of brokers, custodians, exchanges, and public companies that have been built around a 9-to-5, Monday-to-Friday market cycle for over a century.
