The secondary market for tokenized securities is the industry’s most honest mirror. Every conference panel discussion, every white paper, every institutional announcement about tokenization’s potential ultimately depends on one question: can investors sell what they buy? The answer in Q1 2026 is: yes, eventually, with patience and at a significant liquidity discount.
The numbers are stark. Bid-ask spreads on tokenized securities trade at 200–500 basis points — compared to 1–5 basis points for NYSE-listed equities and 5–15 basis points for investment-grade corporate bonds. Settlement may take T+1 to T+3 rather than the T+0 promised by blockchain proponents. Daily trading volume across all US-regulated digital securities venues is an estimated $30–50 million combined — roughly equal to 90 seconds of NYSE trading volume. These are not the metrics of a liquid market; they are the metrics of an illiquid market that is trying, with genuine effort, to become something better.
Platform-by-Platform Analysis
tZERO: The Incumbent
tZERO is the most established US digital securities trading venue, operating since 2019 under Overstock.com parent company PRX. It holds both ATS and broker-dealer registrations and offers mobile and web trading interfaces. Listed securities include tZERO’s own equity (TZROP), the ASPEN token (St. Regis Aspen Resort tokenized ownership), and a small number of other digital securities.
Daily trading volume is estimated at $10–20 million on active days, with significant variance. The TZROP token (tZERO’s own security token) accounts for a substantial portion of trading volume, which is a concerning sign about the depth of third-party listings. tZERO has struggled to attract new listings since 2021; regulatory uncertainty under the Gensler-era SEC made issuers reluctant to list on secondary markets that might attract enforcement scrutiny.
The platform’s investor base of approximately 50,000+ registered users is large by digital securities standards but small relative to any traditional brokerage. The accredited-investor-only restriction for most listings is the primary constraint: accredited investors are a narrower, more sophisticated audience that tends to have existing private market alternatives and lower need for a novel trading platform.
INX: The Regulated Challenger
INX Digital completed a Reg A+ initial public offering in 2021 — the first SEC-registered token IPO in US history, raising $85 million from approximately 7,000 investors. INX holds both broker-dealer and ATS registrations and offers trading in both crypto assets and digital securities. Its unique regulatory positioning (regulated for both securities and crypto) gives it more product flexibility than tZERO.
Daily volume on INX is estimated at $5–15 million, with significant crypto trading comprising a portion of that figure. INX has listed a small number of digital securities and maintains a focus on expanding its asset roster. The Reg A+ IPO demonstrated that retail investors will participate in token offerings — but converting that interest into active secondary market trading has been challenging.
Securitize Markets: Institutional, Private-Facing
Securitize Markets operates an ATS focused on institutional and accredited investor transactions in tokenized private equity, real estate, and fund products. Unlike tZERO and INX, Securitize Markets does not publish volume data and does not operate a continuous order book for public view. Transactions appear to be primarily negotiated block trades rather than open-market executions.
This structure serves Securitize’s institutional clientele (KKR, Apollo, Hamilton Lane fund investors) but does not contribute meaningfully to price discovery or retail liquidity. It is closer to a private secondary market platform (like Forge Global or EquityZen for private company shares) than to a true exchange.
Structural Causes of Thin Liquidity
Six structural factors explain why secondary markets for tokenized securities remain illiquid, and understanding all six is necessary to understand what would need to change.
1. Accredited-only investor universe: With most tokenized securities restricted to accredited investors, the addressable trading population is 13 million US households — and the actively trading subset of those households on novel platforms is a fraction of that. NYSE has access to 60+ million household accounts.
2. Transfer restrictions: Many tokenized securities include on-chain transfer restrictions that require issuer approval for secondary trades. These restrictions exist for regulatory compliance (ensuring buyer accreditation) but add friction that discourages trading.
3. No institutional market makers: Virtu, Citadel Securities, and Jane Street provide continuous liquidity on traditional exchanges because volume is sufficient to generate revenue at 1–5 basis point spreads. Tokenized securities volumes are 1,000x too small to attract algorithmic market makers. Without market makers, spreads widen; wide spreads deter trading; low trading volume keeps market makers away.
4. Fragmented venues: A security listed on tZERO cannot be traded on INX. Unlike traditional securities where brokers route orders to the best available price across multiple venues, tokenized securities are siloed to their listing platform. Total addressable liquidity is divided by the number of venues rather than aggregated.
5. No broker-dealer participation: The 5,000+ registered broker-dealers in the US are not connected to tokenized securities ATS platforms. Retail investors cannot buy tokenized securities through Schwab, Fidelity, or Robinhood. Until that integration occurs, the market is limited to direct platform users.
6. Psychological price discovery gap: Many tokenized securities are illiquid enough that pricing is stale — the last trade may have occurred days or weeks ago. This stale pricing makes it impossible for buyers and sellers to agree on fair value, further suppressing trading activity.
Progress vs. Promise: 3/10
An honest assessment: tokenized securities secondary markets rate 3 out of 10 on progress toward their theoretical potential. The infrastructure exists — ATS registrations, broker-dealer licenses, trading technology. The legal framework exists — Reg D, Reg A+, Reg CF all permit secondary trading. What does not exist is the flywheel of volume that attracts market makers, which reduces spreads, which attracts more investors, which generates more volume.
Timeline for Improvement: 2027–2030
Two catalysts could accelerate this timeline. First, a large Reg A+ tokenized offering (target: $75 million, 50,000+ investors) in a high-demand asset class (real estate income fund, private credit fund) would create a critical-mass investor base for secondary trading. Second, broker-dealer integration — particularly if Schwab, Fidelity, or Robinhood integrated a tokenized securities ATS as a product offering, adding millions of potential buyers and sellers to the ecosystem overnight.
Without one of these catalysts, the 2027 estimate for meaningful improvement (spreads below 50 basis points, daily volume above $500 million) is optimistic. The 2030 estimate is realistic.
Related Trackers: ATS & Broker-Dealer Licenses · SEC Enforcement Tracker · Institutional Adoption · US Tokenized RWA Dashboard