Jonah Schulman, head of marketing at Security Token Market, published a report last month in which he noted that the average security token return was 8.99% for the month of April 2020.
Meanwhile, a fund that tracks the three largest US indices, including the Dow Jones, S&P 500, and the NASDAQ, was down by -9.5%.
However, the Security Token Market team now reports that the average security token return by asset was down to -0.90%. But they clarified that this didn’t prevent or halt the growth of the total security token market cap or trading volume as there was reportedly a 5% increase in the market valuations of all security tokens combined and a 135% surge in overall trading activity.
The Security Token Market team said that this growth was mostly due to tZERO’s preferred equity shares (TZROP), which hold the majority market share. These shares were up 17.12% and their trading volume increased by over 200%.
Schulman believes it’s important for asset managers, investors, and interested parties to be aware of all potential investment opportunities, which may include security tokens, so that they can help their clients get the best returns and provide downside protection.
“In times of uncertainty, diversifying is crucial to a successful investment portfolio. No one knows for certain what will happen in the US markets or to security tokens, but what I can say is that alternative investments … are creating investment opportunities that we’ve never seen before. They bring potential to provide positive returns even when the world is in a midst of a crisis.”
In a recent interview with Crowdfund Insider, Schulman said:
“The most compelling advantages [security tokens offer, in my opinion,] are fractional ownership and democratization. From an investors’ point of view, through democratization and fractionalization, investors are given the opportunity to diversify their portfolio in ways that weren’t really possible before.”
“For instance, if you are an investor looking to invest in real estate, but cannot afford to buy the property outright, and you are having difficulty finding opportunities due to many of them occurring behind closed doors, there isn’t much you can do. Through the tokenization process, an issuer can essentially break up their real estate property into thousands of shares (fractionalization) to allow investors with less capital to participate.”
Some of the security tokens tracked by Security Token Market include the Overstock Preferred Stock, tZERO, SPICE VC, Blockchain Capital’s BCAP token, Lottery.com, among others.
Last month, the Depository Trust & Clearing Corporation (DTCC) introduced two new blockchain initiatives that aim to look into how distributed ledger technology (DLT) can enhance existing settlement processes. DTCC notably handles quadrillions of dollars worth of securities transactions each year.