Wall Street’s tokenization boom could have bigger winners than bitcoin and ether, Citrini says

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$81,767.60 and ether ETH$2,469.50, 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.”

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$171.96·Market Closed and digital brokerage Robinhood HOOD$107.02·Market Closed offer exposure through their trading platforms and blockchain infrastructure, while stablecoin issuer Circle CRCL$80.85·Market Closed 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$15.62·Market Closed for stablecoin payments, and institutionally focused digital asset exchange operator Bullish BLSH$31.41·Market Closed, CoinDesk’s parent company, which is acquiring share registrar Equiniti.

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.

“If we’re right that stocks, commodities and other financial assets are moving onchain, then eventually all of the financial products built around those assets should follow them,” the report said.

Its analysis highlighted Aerodrome (AERO), a trading platform that could collect fees from tokenized stock transactions, and Maple SYRUP$0.2335, which manages blockchain-based lending products for institutional investors.

It also included Pendle (PENDLE), which allows investors to trade future income from interest-bearing assets, while Ondo Finance ONDO$0.4952 provides tokenized U.S. Treasury, stock products and, more recently, perpetual futures. Aave AAVE$166.75 offers lending infrastructure, Uniswap (UNI) provides a decentralized marketplace for trading, while crypto protocol Ethena (ENA) issues stablecoins and recently expanded into digital finance, combining high-yield savings, cards and payments.

Citrini’s crypto basket also included ether.fi (ETHFI) for crypto-based financial services, Chainlink LINK$12.64 for market data and LayerZero ZRO$1.9845 for connecting blockchains. All three could benefit as tokenized assets spread across financial platforms and blockchain networks.

The report also highlighted Derive DRV$0.3615, a decentralized options trading protocol that could benefit if tokenized stocks and other financial assets bring more derivatives trading onto blockchains.

It also gave a nod to up-and-coming perpetual futures trading venues Lighter (LIT) and Variational (VAR). Perpetual futures, or perps, are contracts that let traders bet on an asset’s price rising or falling without owning it, and unlike traditional futures, they have no expiration date. Hyperliquid (HYPE) has emerged as a dominant blockchain-based platform for perps trading, Citrini said the two challenger venues may gain traction alongside Hyperliquid as the broader perps market grows. The report also included exposure to Hyperliquid in its stock basket via the Bitwise Hyperliquid ETF (BHYP).

The Citrini report, however, cautioned that growing trading volumes and network activity don’t always translate into higher token prices. Investors need to look at how protocols make money, who collects the fees and whether token holders get a share of that.

The report also flagged liquidity spread across competing blockchains, security risks that could slow adoption, and legal hurdles of synthetic tokenized stocks that offer exposure to share prices without granting investors the voting rights or direct ownership that come with traditional shares.