Crypto-related stocks rose sharply on Friday as Bitcoin reclaimed the $80,000 level and investors responded to a new US regulatory framework for tokenized stocks.
Strategy (formerly known as MicroStrategy) MSTR gained about 12%, while MARA Holdings rose 9%. Coinbase Global surged 10%, Galaxy Digital and Circle Internet Group each gained 7% and 6% respectively, while Robinhood Markets added 7.5%.
Bitcoin BTC climbed more than 5% to move above $80,000 for the first time in two weeks.
The cryptocurrency had spent recent weeks consolidating between roughly $75,000 and $78,000.
The gains came after the US Securities and Exchange Commission announced a five-year exemption that allows certain platforms to facilitate trading in blockchain-based or tokenized stocks and other securities.
SEC introduces five-year innovation exemption
The SEC’s new “Innovation Exemption” provides tokenized securities venues with a five-year exemption from certain rules that apply to traditional stock exchanges, including the Nasdaq and New York Stock Exchange.
The exemption also covers certain liquidity providers, which will receive a five-year exemption from dealer registration requirements.
Tokenized stocks are digital representations of shares that can be traded on a blockchain.
The SEC said the framework is intended to address regulatory challenges that could otherwise make it difficult for platforms to comply with federal securities laws without potentially burdensome changes to their business models.
Platforms will have to notify companies before listing tokenized versions of their shares. They cannot offer the tokenized securities if the underlying issuer objects.
The SEC also said synthetic tokens that provide exposure to stocks through derivatives or other products will not be permitted under the exemption.
SEC Chairman Paul Atkins said the Innovation Exemption is intended to facilitate on-chain trading of certain tokenized stocks while maintaining investor protections and market integrity standards.
The exemption is set to expire five years after publication, while the SEC has invited public comments as it considers potential further changes.
Tokenized stocks could expand crypto platforms
The SEC said tokenized NMS stocks traded under the exemption must provide holders with the same rights and privileges as equivalent traditional shares, including dividend and voting rights.
Tokenized securities venues can trade eligible NMS stocks through permissioned automated market makers and liquidity pools, although the SEC has imposed limits on the number of symbols and trading volume.
Venues must also stop trading a tokenized stock at the same time as trading in the underlying stock is halted on its primary exchange.
They must provide public information about their operations, trading activity, and the activities of their affiliates.
The crypto industry has argued that tokenization could change how financial markets operate by allowing shares to trade around the clock and settle transactions more quickly.
The SEC also highlighted potential benefits including greater liquidity, lower transaction costs, self-custody and fractional ownership.
Coinbase has previously signalled plans to offer tokenized stocks in the US when regulations permit.
Robinhood, Kraken and other crypto exchanges already offer tokenized stocks in overseas markets.
Coinbase gains from regulatory clarity
The SEC announcement came days after the US Senate failed to advance the broader CLARITY Act, leaving the cryptocurrency industry without the comprehensive market-structure legislation it had been seeking.
Against that backdrop, Baird reiterated a Neutral rating on Coinbase with a $130 price target, while describing the SEC’s regulatory development as positive for the exchange.
Baird said the exemption could allow Coinbase to offer tokenized equities with full shareholder rights, bringing its asset offering more in line with Robinhood Markets.
The firm also cited a rebound in trading volumes and favourable regulatory activity, as well as Coinbase’s continued development of its “Everything Exchange” strategy.
The SEC’s decision could also create a path for crypto-native platforms to compete more directly with traditional brokerage businesses.
Analysts said tokenized equities could eventually bring platforms such as Coinbase and Robinhood into greater competition with established firms including Morgan Stanley’s E*Trade and Charles Schwab.
For crypto-related stocks, Friday’s gains therefore came alongside a regulatory development that could broaden the range of financial products offered through blockchain-based platforms.
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