The real tokenization revolution is in private markets, not public stocks

Opinion by: Alex Svanevik, CEO of Nansen

Since tokenization first gained mainstream attention during the 2017 initial coin offering boom and early blockchain projects aimed at digitizing assets such as equities and commodities, it has been crypto’s go-to pitch for modernizing finance

For many, however, the conversation stops at tokenizing public equities, putting existing stocks onchain for fractional ownership and 24/7 trading. While these steps are nice to have, they’re a far cry from a revolution. The truth is that equities are already very efficient markets, meaning the marginal gains from deploying blockchain technology are notably small.

This means the fundamental transformation lies in markets and asset classes where inefficiencies are still deeply embedded. Private markets remain less transparent, more expensive to access and off-limits primarily to over 80% of investors. To have an actual influence on finance, we need to rearchitect access to capital itself. Tokenizing private equity has the potential to remake capital formation, not just digitize it, unlocking a massive new level of financial inclusion.

Where are the customers’ yachts?

In today’s system, access to high-growth private companies is limited to accredited investors and institutions, leaving retail investors locked out of early-stage growth opportunities. When a company goes public, venture capitalists and hedge funds have swallowed most of the pie

The public markets weren’t always the late-game arena they are today. Companies IPOd earlier a generation ago, letting retail investors ride decades of growth. Amazon went public at a $438-million valuation, while today’s giants stay private until they’re worth $50 billion. Over the past 20 years, capital formation has shifted upstream, and companies remain private longer; Stripe, SpaceX and OpenAI are now worth tens of billions without ever listing. Meanwhile, accreditation rules limit participation in private markets to those with a $1-million net worth or high incomes.

Related: Private companies line up to join Robinhood’s tokenized equity platform: CEO

This trend isn’t limited to Silicon Valley. Companies increasingly raise capital across Europe, Asia and the Gulf through private placements, sovereign funds and family offices, not initial public offerings (IPOs)

The result is a global freeze-out of ordinary investors from the most dynamic parts of the economy.

Tokenization has the potential to break this cycle, not just for investors but for the companies themselves. Instead of relying on a limited pool of venture funds or high-net-worth individuals, putting private shares onchain would allow companies to raise capital from a broader global audience

By representing ownership digitally and enabling programmable transfers, blockchain infrastructure makes it possible to securely fractionalize, trade and settle these assets without the friction of traditional intermediaries. That means lowering the cost and complexity of fundraising while unlocking the door for everyday investors to participate in their growth. It would also provide more liquidity to early employees and backers by making selling a portion of their shares easier without waiting for a full exit, like an IPO

Without this, people can spend years building something meaningful yet remain locked into untouchable equity — a problem that tokenization can finally solve.

Careful of risk or hoarding the reward

By the end of 2025, private markets will represent a projected $15-trillion-walled-off opportunity, dwarfing public equities’ growth potential. Yet most people can’t participate; retail investors compose 62% of US households and are systematically excluded by accreditation laws and disclosure requirements designed in the 1930s. Enabling companies to tokenize shares before $300 million in revenues would give millions of people access to innovation-stage companies that have historically been the domain of VCs and hedge funds. Risks have to be acknowledged, but they shouldn’t be overstated.

One of the most persistent objections is that tokenization could expose retail investors to risks they may not fully understand or can afford and that private equity is too illiquid, speculative and volatile. But this overlooks what’s already happening in public markets. If a 22-year-old can invest in leveraged meme stocks or trade crypto options, why shouldn’t they be able to put $500 into an early-stage AI startup they believe in, provided there’s proper disclosure and oversight? The real issue is the lack of financial education, which persists in our school systems and leaves everyday investors woefully unprepared to navigate any market, public or private.

Tokenization doesn’t mean throwing out safeguards. More transparency results in better outcomes, and blockchain technology offers that. The question is: Whose interest is the current system protecting? There is a middle ground between locking small investors out and allowing them access safely, and this is precisely what tokenization can do. It’s not just a 10x improvement; it’s a 100x unlock for financial inclusion, giving everyday people the chance to back the companies they believe in.

Access is the ultimate asset

Tokenizing private equity could rewrite the rules of participation, opening a massive new addressable market for companies and dismantling a system where only accredited investors, defined by arbitrary wealth thresholds, are trusted to take risks. It also creates a two-way unlock: Startups can tap new global capital sources, and investors worldwide can participate in economic growth from day one. For capital markets in emerging economies, where IPO infrastructure is thin or nonexistent, tokenized private equity could leapfrog legacy structures entirely.

Yes, the stakes are high, but this could be one of the biggest democratizations of wealth creation in history. The alternative is keeping capital formation locked in an expensive, exclusionary system that limits innovation and participation. Tokenization doesn’t just speed up transactions; it rewires who gets to participate, shifting the center of gravity from a handful of gatekeepers to a global network of contributors. That shift wouldn’t just change how companies are funded but who shapes the economy.

We don’t need faster trains on old tracks — we need entirely new rails. Tokenized private equity could lay them and may define whether the next generation builds wealth or watches others do it from the outside.

Opinion by: Alex Svanevik, CEO of Nansen.

This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

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