Tokenized ETFs are finding their onchain PMF

Tokenized stocks have grown into a $1.6 billion market, split between single equities and ETFs. The ETF side is smaller but worth a closer look: it tracks the same broad indexes that dominate traditional markets, and it held up well against crypto through a volatile year. The charts below break down the market, the two largest indexes onchain, and the issuers behind them.

1) The tokenized stock market

• Tokenized stocks grew more than 30x over the past year. Tokenized equities reached $1.2 billion and tokenized ETFs $459.8 million, a combined $1.6 billion, with equities holding 71.7% of the total.

• The market splits into single names and baskets. Tokenized equities offer exposure to individual companies onchain (e.g. Nvidia, SpaceX); tokenized ETFs offer exposure to indexes (e.g. S&P 500, Nasdaq-100) that track a basket of assets in one instrument.

• The momentum may be starting to shift. Over the past 30 days, the tokenized ETF market cap grew 2.8% while tokenized equities fell 9.4%. Tokenized ETFs may open the door to a different kind of buyer, who wants steady returns over longer periods of time instead of actively trading.

2) S&P 500

• S&P 500 trackers make up nearly a third of the tokenized ETF market. The three largest, Ondo Finance's IVVon ($67.9 million) and SPYon ($41.9 million) plus xStocks' SPYx ($39.0 million), together hold $148.8 million, 32.4% of tokenized ETFs.

• Each offers exposure to the most widely held S&P 500 ETFs offchain. The S&P 500 is the benchmark of the roughly 500 largest U.S. listed companies; IVV is BlackRock's iShares Core S&P 500 ETF and SPY is State Street's SPDR S&P 500 ETF Trust.

• The index that won offchain is winning onchain too. At $148.8 million onchain versus a combined $1.7 trillion for IVV and SPY offchain, the onchain market is a fraction of the size, yet the same index leads both. That overlap may be an early sign the two environments are starting to converge.

3) S&P 500 vs. Bitcoin

• Over the past year tokenized ETFs with exposure to the S&P 500 climbed steadily while Bitcoin was volatile and fell. The tokenized ETFs ended the year up about 20%, while Bitcoin, after peaking up about 15% in October 2025, fell to end the year down 44.9%.

• Diversification drives the gap. The S&P 500 spreads exposure across roughly 500 companies, so no single name moves it much: a 10% fall in one constituent shifts the index about 0.2% at typical weights, whereas a 10% fall in Bitcoin is a 10% fall in the whole position.

• Holding a single asset takes conviction; an index doesn't. Sitting through Bitcoin's swings means backing a strong view that it recovers, while the S&P 500 spreads risk across roughly 500 of the largest U.S. companies, so holding it takes far less faith.

4) Nasdaq-100

• The Nasdaq-100 is gaining an onchain following through tokenized QQQ. Ondo Finance's QQQon ($36.9 million) and xStocks' QQQx ($31.0 million) combine for $67.9 million, 14.8% of tokenized ETFs.

• Both offer exposure to the Nasdaq-100, a tech-heavy benchmark. The index covers the 100 largest non-financial companies on the Nasdaq, concentrated in mega-cap technology like Apple, Microsoft, and Nvidia; Invesco's QQQ Trust is the largest fund tracking it offchain.

• Onchain QQQ is even smaller against its offchain base. At $67.9 million against $472.9 billion, the offchain fund is roughly 7,000 times larger, a reminder that ETF tokenization is still early.

5) Nasdaq-100 vs. Ethereum

• The same divergence shows up between the Nasdaq-100 and Ethereum. QQQ trackers ended the year up about 32%, while Ethereum, after peaking up nearly 88% in August 2025, fell to end the year down 37.5%.

• Ethereum is a closer comparison than Bitcoin, since both are often seen as technology bets. But the index spreads across 100 companies while Ethereum relies on a single network.

• Onchain holders got equity-style returns without leaving the blockchain. Through a year when crypto fell and equities rose, tokenized index exposure kept them on the right side of that divergence.

6) The opportunity

• Two issuers hold almost the entire tokenized ETF market. Ondo Finance accounts for $340.7 million (74.1%) and xStocks for $79.7 million (17.3%), leaving all others combined at $39.4 million (8.6%).

• Each takes offchain ETFs and issues tokens that track their value onchain, backed 1:1. The tokens give economic exposure to the underlying funds rather than direct ownership and trade 24/7.

• Ondo is building scale first, keeping its tokenized ETFs free to hold. It charges no management fees today, and its disclosures cap any future entry or exit charge at 0.1% of the underlying ETF's price. That is the same model that built names like BlackRock and Invesco offchain: low fees on large asset bases.

The rise in demand for tokenized ETFs coincides with a year of falling crypto prices. The real test is whether that demand persists through a crypto recovery and establishes tokenized ETFs as a mature asset class onchain.

Platform updates

• Listed XRP Ledger, the L1 blockchain underpinning Ripple's global payments infrastructure, with a full set of standardized metrics. XRP Ledger currently averages 16,222 daily active users and processed 56.5 M transactions over the past 30 days.

• Listed Midnight, a privacy-first L1 and Cardano partner chain that uses zero-knowledge proofs to enable confidential smart contracts. Available metrics include transaction counts, block time, and contracts deployed.

• Listed four AI/robotics themed tokenized stocks from Reserve: AI Photonics DTF, AI Power DTF, AI Infrastructure DTF, and Robotics DTF. A DTF (Decentralized Token Folio) is Reserve's onchain index format: one token backed by and redeemable for a basket of underlying assets.

• Expanded the Asset APY metric to cover 10 additional tokenized funds, including 8 Midas products, Theo’s thBILL, and Ondo Finance’s OUSG.

Interested in getting listed? Read more here.

The state of tokenized assets

Token Terminal now tracks 4,942 tokenized assets across 316 issuers and 47 chains, with a combined market cap of $339.5 B and 280.3 M holders. Market cap slipped 1% on the week (-2.7% over 30 days), yet asset count, issuers, and holders all grew. The decline sat in the two largest sectors, stablecoins and funds, while the smaller two edged higher:

• Stablecoins held the anchor at $297.0 B (-$1.74 B 7d), led by USDT ($184.3 B) and USDC ($72.8 B). Transfer volume rose 12.5%, so settlement demand climbed even as balances dipped.

• Funds eased to $33.9 B (-1.7% 7d), with sUSDS ($5.5 B) and USYC ($3.1 B) the largest positions. Transfer count still rose 8.7%, so onchain activity held up as value declined.

• Commodities were roughly flat at $6.9 B (+0.5% 7d) but stayed down 6.8% over 30 days as gold softened, led by XAUT ($2.5 B) and PAXG ($1.8 B).

• Stocks gained 2.0% to $1.6 B, concentrated in Ondo (60%) and xStocks (30%). Trading cooled sharply, with transfer volume down 47% on the week.

Explore the full dataset here.

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Standard Chartered initiates Aave and Morpho coverage

Standard Chartered initiated coverage of the two largest DeFi lending protocols, setting end-2030 price targets of $3,500 for AAVE (a 50x increase) and $60 for MORPHO (a 33x increase).

Both reports use Token Terminal data and rest on the same thesis: tokenized assets in DeFi growing 37x to $2.7 trillion by 2030, with the largest protocols absorbing a proportional share.

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