Security token markets continued to fall last month, with the volume of trade across the sector falling by over 40%.
Security token volumes fall by half for two consecutive monthsNOTHINGS
The upward momentum enjoyed by the security tokens industry in the first three quarters of 2020 has diminished sharply, with monthly volume falling by more than 40% for the second consecutive time.
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Since reaching almost US$22 million in August, monthly trade in security tokens fell to US$9.15 million in September, before falling to US$5.27 million in October.
With 98 percent of the industry’s trade taking place in Overstock’s proprietary alternative trading system tZERO, it appears Overstock’s plan to increase volumes by issuing a ‘digital dividend’ in the form of security sent to OSTK shareholders has lost its steam.
Overstock’s OSTKO security token – which represents 50% of the market capitalisation of security tokes combined – lost 18% of its value during October, while its monthly volume fell 20% to around $3 million. OSTKO’s market capitalisation of $252 million would rank it as the 53rd largest asset in cryptomorphism overall, according to CoinMarketCap.
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Interestingly, the token began trading in October for US$70, almost 20% less than OSTK shares. However, OSTKO closed the month at $57 – a dollar higher than Overstock’s share price.
Most of October’s decline in the volume of the security token took place in the tZERO TZROP token markets, which generated just US$2.15 million in trading last month – down 60 percent from US$5.29 million in September. The token also lost 8% of its value last month.
With a capitalisation of US$180.7 million, the TZROP is the second largest security token, making it the 65th largest overall crypto.
Although tZERO has maintained dominance over the secondary security token markets to date, an increasing number of companies are building platforms to facilitate the creation and issuance of security tokens.
A week ago, Ignuim joined the Fundwise stock crowdfunding platform to launch a tokenised crowdfunding service aimed at small and medium-sized companies.
Last month, Japanese financial services giant SBI Holdings announced that it would launch a security token offering to issue shares in its e-sports subsidiary.