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Galaxy Digital says Robinhood’s tokenized stocks trading challenges NYSE’s competitive edge

 

By Reel Coverage Jul 06, 2025 

 

In a weekly research brief, Galaxy Digital discusses Robinhood’s tokenized stocks trading, calling it a challenge to deep concentration of liquidity on major TradFi exchanges like NYSE. 

 

 

On June 30th, 2025, Robinhood announced the launch of its Ethereum-based Layer 2 blockchain and tokenized stocks and ETFs, giving EU customers exposure to the US equity market. 

 

With an initial 24/5 trading advantage to traditional stock exchanges, Robinhood enables European customers access 200+ US stocks and ETFs with longer trading hours through tokenized derivatives. 

 

Robinhood’s Chairman and CEO, Vlad Tenev, said that the exchange’s latest offering lays the groundwork for crypto to become the backbone of the global financial system. 

 

Stock tokens will initially launch on Arbitrum with plans to move to Robinhood’s owned L2 blockchain, an optimized for tokenized real-world assets chain, built to support 24/7 trading, seamless bridging, and self-custody.

 

Robinhood’s big tokenization push

 

Robinhood’s push to tokinize US equity market has been met with great enthusiasm, where sentiments consider the tokenization of securities to be one of the best application of blockchain tech and comments expect expansion into every single asset class, a proliferation expected by 2026.

 

However, the question of security remains, with contributors highlighting that Robinhood’s tokenized shares may represent share ownership in the most transparent form but that the centralized custody of the underlying stock remains a critical flaw in the process. 

 

Galaxy Digital, in a Friday report, takes an analytic stance on the development, exploring its effects on the traditional investment scene. 

 

Galaxy notes that moving stocks trading on-chain directly challenges the deep concentration of liquidity and activity that gives major TradFi exchanges, effecting eroding core revenue streams including trading fees and sale of market data. 

 

 

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Robinhood’s tokenization effort effectively pulls assets out of the traditional market trading flow and inserts them directly onto blockchain rails (or Bitsamp) to allow 24-hour trading. This directly challenges the deep concentration of liquidity and activity that gives major TradFi exchanges (e.g. NYSE) their competitive advantage. This moving of trading volume could erode the exchanges' activity and core revenue streams, which rely on trading fees and the sale of market data.

 

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Galaxy Digital wrote.