Security token volumes crash by half for two consecutive months

The bullish momentum enjoyed by the security token sector in the first three quarters of 2020 has well and truly subsided, with monthly volume crashing by more than 40% for the second time in a row.

Since it tagged almost $22 million in August, monthly security token trade slumped to $9.15 million in September before sliding down to $5.27 million for October.

With 98% of the sector’s trade taking place on the Overstock-owned alternative trading system tZERO, it appears Overstock’s plan to bolster volumes through issuing a “digital dividend” in the form of security airdropped to OSTK shareholders has lost its steam.

Overstock’s OSTKO security token — which represents 50% of the combined security token market cap — shed 18% of its value during October, while its monthly volume fell 20% to roughly $3 million. OSTKO’s market cap of $252 million would rank it as the 53rd-largest crypto asset overall, according to CoinMarketCap.

Curiously, the token began October trading for $70, nearly 20% lower than OSTK shares. However, OSTKO closed the month at $57 — a dollar higher than Overstock’s share price.

The bulk of October’s decline in security token volume took place in the markets for tZERO’s TZROP token, which generated just $2.15 million in trade this past month — down 60% from September’s $5.29 million. The token also shed 8% of its value last month.

With a capitalization of $180.7 million, TZROP is the second-largest security token, ranking it as the 65th-largest crypto asset overall.

While tZERO has maintained dominance over the secondary security token markets to date, an increasing number of firms are building platforms to facilitate the creation and issuance of security tokens.

One week ago, Ignuim teamed up with equity crowdfunding platform Fundwise to launch a tokenized crowdfunding service targeting small- and medium-sized enterprises.

Last month, Japanese financial services giant SBI Holdings announced it would conduct a security token offering to issue shares in its e-sports subsidiary.