Rethinking Market Structure: 24/7 Trading, Tokenization, and the Future of Liquidity 

At the recent FOW conference, one message came through clearly: 

market structure is entering a new phase of transformation. 

Two topics dominated the discussion 24/7 trading and tokenization of assets and while both are often framed as inevitable, the reality is more nuanced. What’s emerging is not a simple extension of existing markets, but a deeper redesign of how liquidity is created, accessed, and managed. 

Below are the key takeaways shaping the conversation. 

1. Access vs. Market Quality 

The case for continuous trading is compelling on the surface. 

Global investors operate across time zones. Retail participation is rising. Risk events occur outside traditional market hours. From this perspective, limiting trading to fixed windows increasingly feels outdated. 

However, the debate highlighted a critical distinction: 

Access does not equal liquidity and liquidity does not guarantee quality. 

Evidence from existing extended-hours trading shows: 

• Activity remains highly concentrated in core hours 

• Overnight sessions often exhibit wider spreads and thinner depth 

• Price formation can become less efficient and more volatile 

The risk is that extending trading hours without sufficient participation leads to fragmented liquidity pools, where pricing is driven by a limited set of actors rather than a broad market consensus. 

2. Fragmentation: The structural risk 

Fragmentation emerged as a recurring concern across both discussions whether in extended-hours trading or tokenized markets. 

In traditional equity markets, liquidity is already distributed across multiple venues. Introducing: 

• overnight sessions, 

• alternative trading systems, 

• tokenized versions of assets, 

can further dilute depth unless carefully managed. 

The result can be: 

• Reduced transparency 

• Increased reliance on market makers 

• Greater exposure to price dislocations 

• Higher execution costs for end investors 

This raises a fundamental question: 

Are we improving access to markets or weakening the integrity of price discovery? 

3. Tokenization: A Post-Trade revolution 

While much attention is placed on tokenized trading, the more transformative impact lies in post-trade infrastructure. 

Tokenization has the potential to fundamentally reshape: 

• Collateral mobility 

• Settlement speed 

• Asset accessibility 

• Capital efficiency 

Concepts such as atomic settlement where cash and assets exchange simultaneously could significantly reduce counterparty risk and free up capital currently tied up in settlement cycles. 

However, scaling this model requires solving several non-trivial challenges: 

• Interoperability across platforms and blockchains 

• Legal clarity around ownership and settlement finality 

• Integration with clearing houses and custodians 

• Regulatory harmonization across jurisdictions 

In practice, the likely outcome is not disruption, but gradual integration into existing frameworks. 

4. The convergence of TradFi and DeFi 

Rather than a binary shift from traditional finance to decentralized finance, the industry is moving toward hybrid models. 

Traditional financial institutions are increasingly: 

• engaging with digital assets, 

• adopting tokenization initiatives, 

• leveraging blockchain for settlement and collateral, 

• exploring stablecoins and programmable money. 

At the same time, crypto-native markets are maturing: 

• Institutional participation is rising 

• Derivatives markets are becoming more sophisticated 

• Infrastructure is improving around custody, reporting, and risk 

The convergence is not about replacement it is about enhancement. 

The future market structure will likely combine the resilience and trust of TradFi with the efficiency and flexibility of digital infrastructure. 

5. Continuous markets require continuous infrastructure 

One of the most important insights from the discussion is that 24/7 trading is not just a trading problem. 

It has system-wide implications: 

Front Office 

• Pricing models must adapt to lower-liquidity environments 

• Risk management becomes continuous rather than session-based 

Middle Office 

• Margining and collateral calls may need to operate in real time 

• Portfolio monitoring must be automated and always-on 

Back Office 

• Settlement cycles need to align with continuous trading 

• Payment rails must support real-time transfers 

Compliance & Regulation 

• Surveillance and controls must operate 24/7 

• Investor protection frameworks must evolve accordingly 

Without synchronized development across these layers, continuous markets introduce more risk than benefit.

6. Liquidity will define the outcome 

A consistent theme across both panels was that liquidity not technology will determine success. 

Key observations: 

• Current overnight trading volumes remain marginal (often <1% of total turnover) 

• Institutional participation is still concentrated in core hours 

• Retail demand is growing, but may not provide sufficient depth alone 

Even in crypto markets which already operate 24/7 liquidity varies significantly by time and venue, reinforcing the importance of participation over availability. 

Final Thoughts: Evolution, not revolution 

The direction of travel is clear: 

• Markets are becoming more global 

• Infrastructure is becoming more digital 

• Access is becoming more continuous 

But the transition will not be linear. 

The industry faces a delicate balancing act: 

• Innovation vs. stability 

• Access vs. investor protection 

• Efficiency vs. resilience 

The most successful market structures will not simply extend trading hours or tokenize assets they will rethink how liquidity is aggregated, protected, and distributed. 

What this means for the industry  

At Horizon Trading Solutions, we view these developments as part of a broader structural shift rather than isolated trends. 

As markets evolve, the focus must remain on: 

• preserving market quality, 

• ensuring robust risk management, 

• and building infrastructure that scales with complexity. 

Because ultimately, the question is not whether markets become 24/7 or tokenized. 

It is whether they remain efficient, resilient, and trusted as they do.