Moneywise and Yahoo Finance LLC may earn commission or revenue through links in the content below.
The Securities and Exchange Commission (SEC) has a plan to let people trade stocks on the blockchain, buying and selling them like crypto.
Big Short investor Michael Burry isn’t happy about that, to say the least.
Top Picks
“We may be headed full-on to a Snow Crash cyber-punk future,” Burry wrote on his Substack, Cassandra Unchained (1). “This may be the point in time that needs to be stopped from going forward by some future being.”
If the plan goes through, stocks could be tokenized without a company’s consent and traded 24/7, unlike the U.S. stock market, which opens at 9:30 a.m. ET and closes at 4 p.m. ET on weekdays only.
Burry isn’t the only big name in investing that’s against stock tokenization. Billionaire Ken Griffin’s Citadel Securities, a major trading firm, sent a letter to the SEC pushing back against the plan in December 2025 (2).
Here’s what the change would mean for both companies and consumers.
Fragmentation could be a major problem for tokenized stocks
Bloomberg reports that there will be two types of tokenized stocks under the SEC’s new “innovation exemption” plan: stocks that the companies tokenize themselves or authorize to be tokenized, and stocks that are tokenized by third parties without the company’s consent (3).
Third-party tokenized stocks might not carry all of the privileges that stocks normally come with, such as voting rights and dividends. On the other hand, you would get immediate proof of ownership backed by the blockchain.
“The tokens may not represent actual ownership of the company, and token holders may not get all the benefits of the share,” Daniel Labovitz, CEO of Green Impact Exchange (4), told Business Insider.
Tokenized stocks could also cause fragmentation, Labovitz says: “When the same security trades in different markets that aren’t connected to each other, the price of assets can diverge, meaning that some buyers will overpay for their token.”
This is especially likely since crypto markets are open 24/7, while the stock market operates under much more limited hours. That gives the two markets plenty of time to get off-sync.
Citadel Securities also voiced concerns about fragmentation in their letter to the SEC.
“While the rules governing the national market system can continue to be finetuned, facilitating the emergency of a “shadow” U.S. equity market … would allow tokenized U.S. equities to trade completely outside of the national market system, fragmenting liquidity and undermining core investor protections,” it said.
All of this means that tokenized stocks could make it hard for consumers to know what their investments are actually worth.
Read More: Here’s the average income of Americans by age in 2026. Are you falling behind?
Stock tokenization means less regulation and more consumer risk
Tokenized stocks also don’t have to follow all of the regulatory standards that the stock market does.
“Regulators have one job. Do not open scary doors,” Burry said in a comment to his Substack post. This new plan would open consumers to new and frightening risks they don’t usually have to face when investing through their brokerage or retirement accounts. Safety net not included.
Bloomberg reported that this exemption could weaken key investor protections, such as know-your-customer and anti-money laundering protections.
Decentralized finance (DeFI) platforms are also prone to hacks. On April 18, hackers stole almost $300 million from DeFi platforms, leading to the crypto version of a bank run on one of the largest DeFi platforms (5).
Additionally, 24/7 market access could also lead to increased volatility and even stock manipulation, according to Shay Boloor, chief market strategist at Futurum Equities (4).
Investing probably won’t turn into a cyberpunk dystopia overnight if this exemption goes into law, but it could get much riskier, even for people who play it safe.
Stick to safer bets
While tokenized stocks promise faster trading and around-the-clock access, they also introduce risks that many everyday investors may not fully understand until something goes wrong.
Spreading money across different asset classes can help reduce the impact of sharp swings in any one corner of the market — particularly at a time when investors are grappling with stubborn inflation, geopolitical tensions and questions about where interest rates go next.
In an environment where economic headlines seem to change by the day, adding exposure to assets with a track record of weathering uncertainty may offer some peace of mind.
A tried-and-tested alternative
For those looking to add another layer of stability to their portfolio, gold remains one of the most popular alternatives. The precious metal has long been viewed as a store of value during periods of market turbulence, inflation, and economic uncertainty. It might sound silly, but gold is also a physical thing in an age of digital objects.
What’s more, gold prices have surged by over 30% in the past year, according to APMEX, outperforming the broader S&P 500 index over the same period (6).
The precious metal’s appeal stems in part from its independence. Unlike stocks, its value isn’t tied to the earnings performance of a single company or sector. That can make it a useful diversifier when markets become unpredictable.
One way to invest in gold and silver that also provides significant tax advantages is to open a precious metals IRA with the help of U.S. Gold Bureau.
Precious metals IRAs allow investors to hold physical gold, silver or other related assets within a retirement account, which combines the tax advantages of an IRA with the protective benefits of investing in gold and silver, making it an option for those looking to help shield their retirement funds against economic uncertainties.
When you make a qualifying purchase with U.S. Gold Bureau, you can even receive up to $20,000 in gold for free.
Diversify with real estate
Real estate is another physical asset, and one that can also play a valuable role in a diversified portfolio. Property values and rental income often move independently from stock market performance, giving investors exposure to a different source of returns.
And thanks to modern investment platforms, you no longer have to get a second mortgage and become a landlord in order to invest in real estate.
Mogul is a real estate investment platform offering fractional ownership in blue-chip rental properties, which gives investors monthly rental income, real-time appreciation and tax benefits — without the need for a hefty down payment or 3 a.m. tenant calls.
Founded by former Goldman Sachs real estate investors, their team handpicks the top 1% of single-family rental homes nationwide for you. Simply put, you can invest in institutional quality offerings for a fraction of the usual cost.
Each property undergoes a vetting process, requiring a minimum 12% return even in downside scenarios. Across the board, the platform features an average annual IRR of 18.8%. Their cash-on-cash yields, meanwhile, average between 10% to 12% annually. Offerings often sell out in under three hours, with investments typically ranging between $15,000 and $40,000 per property.
You can sign up for an account and then browse available properties. Once you verify your information with their team, you can invest like a mogul in just a few clicks.
Those with more capital on hand can expand beyond just vacation and rental properties. If you’re truly looking to diversify your portfolio, you can tap into multiple verticals within a sector to potentially give yourself even more resiliency to change.
Accredited investors can now tap into this opportunity through platforms such as Lightstone DIRECT, which gives accredited investors access to single-asset multifamily and industrial deals.
Lightstone DIRECT’s direct-to-investor model ensures a high degree of alignment between individual investors and a vertically-integrated, institutional owner-operator — a sophisticated and streamlined option for individual investors looking to diversify into private-market real estate.
With Lightstone DIRECT, accredited individuals can access the same multifamily and industrial assets Lightstone pursues with its own capital, with minimum investments starting at $100,000.
Consult an expert
As new investment products continue to hit the market, separating genuine opportunities from unnecessary risks can become increasingly difficult. Before making major changes to your portfolio, it may be worth getting a second opinion from a qualified financial advisor who can help determine whether an investment actually fits your long-term goals.
Financial decisions become especially nuanced for investors with portfolios of $250,000 or more. Managing withdrawals, minimizing tax exposure and ensuring long-term sustainability often requires greater coordination and strategic planning than it once did.
Building a portfolio that can withstand market turbulence isn’t always as simple as adding a few alternative assets and calling it a day. The right mix of investments will depend on your goals, risk tolerance, time horizon and overall financial picture.
You can find a reliable FINRA/SEC-registered advisor near you through WiserAdvisor.
Just answer a few questions about your savings, retirement timeline and overall investment portfolio, and WiserAdvisor will review its network to match you — for free — with up to three vetted, reputable advisors aligned to your specific needs.
WiserAdvisor does the heavy lifting when vetting financial advisors on its roster. Each advisor is screened based on their years of experience, their SEC/FINRA registration and records, and compensation criteria.
Just schedule a no-obligation consultation with your matches to find the best fit for your long-term goals.
Note: WiserAdvisor is a matching service and does not provide financial advice directly. All matched advisors are third parties and specific financial results are not guaranteed.
— With files from Kit Pulliam
You May Also Like
Join 250,000+ readers and get Moneywise’s best stories and exclusive interviews first — clear insights curated and delivered weekly. Subscribe now.
Article Sources
We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines.
Substack (1); Citadel Securities (2); Bloomberg (3); Business Insider (4); BPI (5); APMEX (6)
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
