The predictive power of tokenized stocks that are traded 24/7 is finally receiving the attention of Wall Street and the financial media, after Tesla’s stock tokens signalled bullishness among traders despite a difficult weekend for the electric car maker.
The news of Tesla stock tokens signaling a positive opening on Wall Street later on Monday comes after the company’s factory in Shanghai has been suspended intermittently since mid-March due to COVID-19 lockdowns in the major Chinese city.
According to a Bloomberg report early on Monday, citing an internal company memo, the factory will also remain closed on Monday, with workers asked to stay at home.
Shanghai authorities have ordered a two-phased lockdown for China’s financial capital, a city of more than 25m people, as authorities push to test the city’s entire population for COVID-19.
Still, traders of tokenized Tesla stocks are “signaling confidence” that the car maker will get through the problems facing its Shanghai factory, and that shares will rise on Monday, the Bloomberg report said.
For now, the only major exchanges where Tesla stock tokens are traded are FTX and Bittrex. In addition, an option to trade a synthetic stock token also exists via the decentralized finance (DeFi) platform Mirror Protocol (MIR).
At the time of writing (11:36 UTC), Tesla stock tokens on FTX stood at USD 1,098, up by about 1.26% compared to Friday’s closing price on Wall Street of USD 1,084.47.
At the same time, Mirror Protocol’s synthetic Tesla token (mTSLA), which is traded against the terraUSD (UST) stablecoin and usually trades at a premium, traded at UST 1,121, about 3.4% higher than Tesla’s closing price on Friday.
It is worth noting, however, that trading volume in both of these markets is relatively tiny, with only USD 50,647 worth of Tesla stock tokens changing hands on FTX over the past 24 hours. On Terra’s Terraswap decentralized exchange, only USD 44,655 worth of mTSLA tokens were traded over the same time period.
Still, the fact that Bloomberg highlighted the weekend price moves of Tesla stock token shows that these markets are getting noticed and possibly taken more seriously by traditional investors and institutions.
Despite small volume, the markets could represent useful input for stock traders who are otherwise left in the dark overnight and during weekends when traditional stock markets are closed.
With crypto markets, including tokenized real assets, trading 24/7, a market is now always available, opening up a new way for both individual traders and institutions to hedge their bets and manage risks outside of regular hours.