Tokenized Real Estate Booms While Security Tokens Struggle

Real estate tokens have continued to post a positive performance for investors, gaining an average of 4.27% during April while top securities tokens suffered losses for the month.

The combined capitalization of security tokens fell 8% in total — comprising one of the worst months on record for the nascent sector according to a report published by Security Token Group.

April also saw the combined trading activity for security tokens plummet by 38%.

Real estate tokens post April price gains

The real estate token markets for single-family homes on Patton St, Lesure St, and an apparent building on Appoline St in Detroit all saw big gains in volume this month.

Trade activity for the property on Appoline St almost doubled to post nearly $25,800 alongside a price gain of 1.37%, while Patton’s st increased almost 50% to $10,600 with a 1.81% price gain. Lesure St’s volume upped 38% to $6,042 with a price gain of 1.75%. 

Despite trade activity falling, tokens for homes on Fullerton Ave, Auboden St, and Marlowe St posted price gains of 8.74%, 7.19%, and 4.78% respectively.

With the property tokens also paying double-digit interest annually, the report estimates that “the return for investors is closer to 6% in just the month of April” on average across the sector.

tZERO trade drops by half

The losses suffered across the security token sector were broadly driven by a 16.5% drop in the price of tZERO — which represents 43% of the total industry capitalization.

Trade volume for tZERO fell by more than half, with roughly $125,500 changing hands during April. 

The market’s poor performance comes ahead of the distribution of Overstock’s May 19 digital dividend to shareholders — which will see OSTKO security tokens distributed to on a basis of one token for every ten shares in Overstock held by investors.

Overstock wants traditional stocks on tZERO

During Overstock’s Q1 earnings call on May 7, the firm announced intentions to list traditional stocks on its security token exchange tZERO in the future.

The company also revealed that tZERO’s user base had grown 40% over the previous quarter, with 6,404 accounts active on the platform by April.