'Leveraged' Investment with Apple and Nvidia Tokenized Stocks...Kraken Experiments with Futures and Margin Collateral

▲ Apple (AAPL), NVIDIA (NVDA), Tesla (TSLA), Tokenized Stocks, Leveraged Trading/AI Generated Image

A path has opened to utilize tokenized stocks of Apple (AAPL), NVIDIA (NVDA), and Tesla (TSLA) as collateral for leveraged trading without selling them, leading to a rapid expansion of the collateral market connecting cryptocurrencies and traditional financial assets.

According to Cointelegraph, a cryptocurrency specialized media outlet, on July 4 (local time), cryptocurrency exchange Kraken has begun accepting certain tokenized stocks and exchange-traded funds (ETFs) as collateral for futures and margin trading. Eligible users can open leveraged positions without selling their held assets.

The initial supported assets include 10 types of tokenized stocks and ETFs, including Apple, NVIDIA, Tesla, as well as Strategy (MSTR), SPDR S&P 500 ETF Trust (SPY), and Invesco QQQ Trust (QQQ). A discount rate is applied to the collateral value based on the asset's risk level. A 10% discount is applied to broad market ETFs, while a 30% discount is applied to highly volatile stocks like Strategy and Robinhood Markets (HOOD).

Collateral limits are also set differently for each asset. Broad market ETFs are accepted as collateral up to a maximum of $1 million, while most individual stocks are accepted up to $250,000. The limit for tokenized gold and Circle Internet Group (CRCL) stocks is $100,000. Kraken stated that collateral limits and discount rates may be reviewed and adjusted periodically.

The service is offered to eligible customers outside the United States. In the European Economic Area, tokenized stocks can be used as collateral for futures trading, while margin trading collateral support is provided in other eligible jurisdictions outside the European Economic Area. Cointelegraph reported that the trend of using blockchain-based securities as trading collateral, settlement assets, and institutional lending infrastructure is expanding.

According to RWA.xyz's aggregation, the decentralized value of tokenized real-world assets (RWAs) has grown to approximately $32.6 billion. The tokenized stock market has also expanded from approximately $381 million a year ago to approximately $2 billion. Kraken's expansion of collateral options demonstrates the broadening scope of tokenized stock utilization from simple trading to collateral for leveraged trading.

[Key Article Summary]

-Kraken has started accepting 10 types of tokenized stocks and ETFs, including Apple, NVIDIA, and Tesla, as collateral for futures and margin trading.

-A collateral discount rate of 10% is applied to broad market ETFs, and 30% to highly volatile stocks like Strategy and Robinhood.

-The tokenized stock market has grown from approximately $381 million a year ago to approximately $2 billion, expanding its scope of financial utilization.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*