BlackRock-Backed Securitize Sinks 40% Post-SPAC Despite Tokenization Hype

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The decline follows a broader pattern of newly listed digital asset companies struggling after their market debuts, according to Jeff Dorman, chief investment officer at Arca.

Securitize (SECZ), the BlackRock-backed tokenization platform that went public last week, has faced a difficult launch despite being one of the few publicly traded companies focused directly on one of crypto’s most prominent institutional trends.

The company’s shares dropped as much as 25% on Tuesday before partially recovering, leaving the stock down roughly 40% since its merger with special purpose acquisition company Cantor Equity Partners II was completed.

The sell-off contrasts with rising enthusiasm around tokenization, a rapidly expanding blockchain application on Wall Street. Financial giants including BlackRock, Franklin Templeton, and JPMorgan are exploring ways to bring traditional assets such as Treasuries, funds, credit products, and equities onto blockchain networks. Citi estimates tokenized assets could grow to $5.5 trillion by 2030, while BCG and Ripple forecast the market could reach nearly $19 trillion by 2033.

SPAC-related volatility

Dorman said the decline does not appear to be linked to any major negative developments or concerns about Securitize’s fundamentals.

He noted that large price swings are common following SPAC mergers because ownership often shifts from early investors focused on arbitrage opportunities to long-term shareholders analyzing the company’s business prospects.

SPACs allow private companies to become publicly traded by merging with publicly listed shell companies. After the transaction closes, early SPAC investors frequently exit, creating volatility as new investors reassess the company’s valuation, particularly when trading liquidity is limited.

Crypto IPO concerns weigh on sentiment

Dorman added that recent weak performances from crypto-related public listings have likely made investors more cautious.

Several digital asset companies have struggled after going public. BitGo has fallen sharply since its IPO, Gemini has lost much of its value from its debut, and Bullish has dropped significantly from its initial trading price. Circle has remained above its IPO level but has pulled back substantially from its peak, while Coinbase continues to trade well below its opening price after its 2021 direct listing.

Securitize’s Tuesday decline also came during a broader sell-off across crypto-linked equities, with the Nasdaq falling 2%. Circle shares dropped about 5%, BitGo declined more than 4%, and blockchain company Figure fell nearly 9%.