Robinhood’s Tokenized Stocks Are Becoming a New Memecoin Trade: Report

Traders are reportedly pairing Robinhood’s (NASDAQ: $HOOD ) tokenized stocks with memecoins in liquidity pools, creating markets where a token tied to a public company can be swapped directly for a speculative crypto token.

The activity has grown quickly on Robinhood Chain, where traders can use Stock Tokens representing assets such as Nvidia (NASDAQ: $NVDA ), Meta (NASDAQ: $META ) and the S&P 500 (INDEXSP: SPX) alongside memecoins, according to a Friday report by Bloomberg.

Daily trading volume in memecoin-stock-token pairs reached about $440 million in early September before falling sharply, Bloomberg reported, citing Dune data compiled by crypto analyst Adam Tehc.

The trend gives traders a way to move between traditional stock exposure and some of crypto’s most speculative assets without leaving the blockchain.

Low Ze Sheng, a 27-year-old trader in Singapore who has spent the past two years trading memecoins, told the outlet that the setup changed how he viewed the tokens. He described buying a stock token tied to Snap as part of a trade for a memecoin.

“It feels like I'm in the Snapchat trade since I need to have it to buy the memecoin in the liquidity pool,” Low said.

Robinhood says its Stock Tokens are backed 1:1 by the corresponding shares held by a custodian. The tokens are not the same as owning the underlying stocks and do not provide shareholders with voting rights. Prices in decentralized liquidity pools can also diverge significantly from the underlying shares when liquidity is limited.

That disconnect has already produced sharp moves. A token tied to Hims & Hers (NYSE: $HIMS ), for example, traded at more than four times the price of the underlying stock during a weekend in August, while the actual shares barely moved when US markets reopened.

The phenomenon is also spilling into traditional markets. Shares of small Nasdaq-listed mushroom company Farmmi (NASDAQ: $FAMI ) jumped as much as 321% on September 2 after traders on Robinhood Chain piled into a mushroom-themed memecoin and an unofficial token linked to Farmmi.