Why the STO market will continue to tank in 2021

Structural challenges put the viability of STOs and the benefits they are said to provide into serious question.

STO reality Vs hype

What is a Security Token Offering (STO)?

STOs do not beget liquidity

There are few secondary markets

There are no liquidity providers

“Tokenizing securities is not a magic recipe for liquidity. Tokens can be equally illiquid as their legacy digital or paper certificates. Tokens do not beget liquidity. Technology does not generate liquidity. Buyers and sellers create liquidity.” — Matthew Finestone

Investor demand is probably overblown

STOs don’t offer easy access to a global pool of investors

A US-based example & fragmentation in Asia

It’s a regulatory jungle out there

STOs don’t make fundraising easier and cheaper

Regulatory exemptions don’t necessarily ease the pain

Technology stacks might be incompatible with regulations

A cold, hard, and highly regulated reality to continue into 2020

“We always overestimate what we can accomplish in one year and underestimate what can be accomplished in 10 years.”- Bill Gates



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Anthony Back

Interested in fintech, crypto, ecommerce, cybersecurity and the future of work.