The financial system is undergoing radical changes due to blockchain and tokenization technologies, leading to a rethinking of trading models and market access.
History of Stock Markets
Stock markets have existed for over 400 years. They began in cafes in Amsterdam and gradually evolved into various forms of trading, including paper contracts and electronic trading. With technological advancements, traditional markets are becoming less relevant.
Challenges of Fixed Trading Hours
Fixed trading hours create distortions and advantages for institutional traders. For instance, the 'night effect' strategy demonstrates how trading before and after market hours can yield significant profits for those with access to information during off-hours. These limitations highlight the inequality in market access.
Tokenization and New Technologies
Tokenization of assets opens up opportunities for more inclusive markets where stocks and funds can be traded 24/7. As expressed by Larry Fink, CEO of BlackRock, the ideas of tokenization can revolutionize investing by simplifying processes, reducing transaction times, and driving economic growth.
The shift towards tokenization in the market signals the beginning of a new era in the financial system, where access becomes more democratic and transaction processing time is minimized.
