Wall Street’s Digital Token Broker tZERO Posts Record Growth

Overstock’s shares have jumped by 8% following the release of new data regarding user and trading activity on the company’s tZERO alternative trading system (ATS) for security tokens.

An announcement published by tZERO on June 10 noted that May was the exchange’s strongest month on record, with 423,000 digital securities changing hands on the platform last month.

The spike in activity follows Overstock’s ‘digital dividend’ distribution — which saw one ‘OSTKO’ security distributed for every ten Overstock shares held by investors.

Overstock declares digital dividend a success

When compared with May 2019, last month saw a fourfold increase in trading volume, while year-to-date (YTD) performance as of June 1 was up by 50%. Saum Noursalehi, the chief executive of tZERO said:

“We had four times the trading volume last month, compared to May 2019. Having significantly enhanced the liquidity on our platform, we are positioned to offer issuers and investors the best trading experience for tokenized securities.” 

The tZERO crypto app, which features a wallet along with buying and selling services for Bitcoin (BTC), Ethereum (ETH), and Ravencoin (RVN), also saw a 15% increase in its user base last month — driving an 85% increase in users over 2020 so far.

Based on data provided during a June 10 ‘Investor Day’ webcast, tZERO appears to have posted earnings before interest, taxes, depreciation, and amortization (EBITDA) of minus $8.25 million for the first quarter of 2020. That may not sound great, but it is the best performance since 2018.

Overstock security tokens dominate rankings

The strong user activity on tZERO shows that Overstock has been largely successful in its aims with the digital dividend, as the firm’s founder and former CEO Patrick Byrne had asserted that the airdrop would drive up tZERO volumes in past shareholder meetings

In its first month of trade, OSTKO has quickly emerged as the top security token by both trade volume and market capitalization — pushing tZERO’s TZROP token down to second place.

According to data published by Security Token Group, the two Overstock-issued security tokens currently represent 71% of the entire security token market capitalization and 95% of trade volume.