The number of unique holders of tokenized exchange-traded funds (ETFs) surged 11,803% year over year (YoY) to an all-time high (ATH) on May 20.
As of press time, the number of tokenized ETF holders was about 44,400, up from 373 a year ago, according to metrics from Token Terminal analyzed by Finbold. Consequently, the unique addresses holding tokenized ETF surged by approximately 119-fold YoY.
With the growing number of investors in tokenized ETFs, the sector has grown in tandem, reaching a market capitalization of roughly $437.6 million at the time of publication. The most demanded tokenized ETFs among these users over the past year have been SPYx (SPDR S&P 500 ETF Trust) and QQQx (Invesco QQQ Trust), with market shares of 49.3% and 18.7%, respectively.
Notably, the Solana (SOL) network accounts for the sector’s lion’s share, currently estimated at around 67.2%. Meanwhile, the BNB chain and the Ethereum (ETH) network account for roughly 17.7% and 10.3%, respectively, of the total tokenized ETFs.
Why is the tokenized ETF space ballooning?
The tokenized ETFs space has ballooned over the past year, driven by 24/7 global trading, ultra-low costs in Decentralized Finance (DeFi), regulatory clarity, and self-custody. With tokenized traditional ETFs on DeFi, more users can seamlessly trade and earn yields unavailable on traditional platforms.
Worth noting, this sector offers crypto users more options to diversify their portfolios with less-volatile assets, without trading restrictions. Moreover, unlike DeFi protocols, which operate continuously and are open to anyone, traditional stock markets close at night and on weekends and often restrict retail access due to geographical limits.
The growth of this space has been heavily influenced by the regulatory clarity in the United States. Under the chair of Paul Atkins, the U.S. Securities and Exchange Commission (SEC) has approved the listing of tokenized assets.
