Author: Jae, PANews
At the start of June, the crypto market and the US stock market reacted in tandem. Cryptocurrency exchanges such as Binance, MEXC, Gate.cn, and Bitget launched 24-hour spot trading of US stocks. However, when users swipe their fingers across their phone screens and a transaction of "Tesla stock tokens" is completed instantly, few question: What's the secret to these exchanges' rapid launch of new products? How do they achieve 24-hour trading outside of the traditional stock market?
The answer points to Alpaca, a fintech unicorn that originated in Silicon Valley, which is the hidden champion of this stock-on-chain trend.
According to The Information, this company, dubbed the "billionaire of blockchain Wall Street," currently monopolizes approximately 94% of the global tokenized US stock and ETF market. Its name is linked to almost every leading player in the tokenized US stock market, including Binance, Kraken, Ondo Finance, xStocks, and Dinari. However, what is little known is that this unicorn remained largely unknown for several years.
A Long Period of Hibernation: From a "Struggling AI Startup" to the "AWS of the Financial World"
Alpaca's story began in 2015 when it was founded by Yoshi Yokokawa, a former CEO from the Lehman Brothers securitization team.
In the era of booming fintech, their initial entrepreneurial path was far from smooth. Co-founder and CTO Hitoshi Harada later admitted in a sharing session, "We started the company simply because we wanted to start a business, which was actually a huge mistake." The company initially attempted to create a deep learning AI product, but lost its way because it deviated from real business pain points. The team submitted applications to Y Combinator, a top Silicon Valley incubator, four times before finally being accepted in the winter of 2019.
The turning point came when the team gained a deep insight into industry trends. At the time, emerging brokerages like Robinhood were sparking a wave of financial democratization, but Yokokawa astutely observed that the superficial euphoria couldn't mask the lagging underlying infrastructure. While Stripe connected transacting parties in the payments sector and Plaid linked bank accounts in the data access field , the market lacked a developer-friendly "brokerage API infrastructure" for securities trading and clearing. Without a mature technological foundation, developers wanting to build a trading application had to start from scratch, navigating a complex web of engineering challenges including brokerage licenses, clearing systems, and custodian banks.
This led the team to make a difficult decision: to completely transform and enter the liquidation brokerage track.
This decision created a very deep moat, but the cost was equally high. The transformation from a technology company primarily focused on machine learning to a licensed self-clearing broker strictly regulated by the Financial Industry Regulatory Authority (FINRA) and the Securities Investor Protection Corporation (SIPC) took several years.
As of early 2025, prior to its large-scale tokenization efforts, Alpaca had established partnerships with over 300 institutions in more than 40 countries, supporting over 9 million brokerage accounts. Its client base includes financial institutions, fintech companies, and automated traders, offering comprehensive access to US stocks, options, and cryptocurrencies, supporting both whole and fractional share trading. With its self-clearing brokerage status and DTCC membership, Alpaca can independently handle the entire process of trade clearing and settlement, creating a highly differentiated competitive advantage among similar API service providers.
The real secret to wealth often lies behind competitive barriers, and the "plumber" who had been silent for many years has ushered in his explosive growth.
Turning Point: Unicorns Racing Amidst the Tokenization Wave
The surge stemmed from a shift in industry trends. In 2024, the global tokenized stock sector experienced explosive growth. According to Token Terminal data, the total market capitalization of the tokenized stock sector exceeded $1.2 billion by the end of 2025, and Alpaca stands precisely at the intersection of traditional brokerage systems and encrypted blockchain ledgers.
Last October, Alpaca officially launched its secret weapon at the TOKEN2049 conference in Singapore: the Instant Tokenization Network (ITN). This deployment is equivalent to building a direct, high-speed channel between the "central processing system" of traditional securities clearing on Wall Street and the "distributed ledger" of the crypto world.
Alpaca's years of accumulated brokerage licenses, self-clearing systems, and API infrastructure have created a formidable competitive advantage. According to data from The Information, as of January this year, Alpaca held approximately 94% of the dominant market share in tokenized US stocks and ETFs. In the tokenization of large-cap and mega-cap US stocks, this figure rises to 97%. Leading players in the tokenization sector, such as Ondo Finance, Dinari, and xStocks, all rely on Alpaca for their underlying clearing and custody services.
In January of this year, Alpaca announced the completion of a $150 million Series D funding round, reaching a valuation of $1.15 billion and officially joining the ranks of unicorns, with total funding exceeding $320 million.
Product Breakdown: How ITN Connects On-Chain and Off-Chain Systems
To understand how Alpaca crushes its competitors, one must dissect ITN's underlying business logic. Essentially, Alpaca plays a triple role in tokenized US stock trading: clearinghouse, custodian, and issuance partner.
Minting: Converting real-world stock into on-chain tokens
Off-chain pre-deposited assets: Institutional clients, namely authorized dealers (APs), hold real U.S. stock spot assets in Alpaca's compliant accounts, or transfer them in through a brokerage firm when making a request.
On-chain minting: AP initiates a request to Alpaca to mint tokenized US stocks through a single API call, and its technical system receives this instruction in real time.
Off-chain clearing and transfer: Alpaca's clearing system immediately executes the operation on the traditional off-chain securities side, deducting an equivalent amount of real US stock from the initiating institution's clearing account and transferring it to the token issuer's custodian account. This process replaces the traditional T+1 or even longer settlement cycle and is completed in milliseconds of API response.
On-chain verification and delivery: After receiving the verification signal from Alpaca, the issuer's system immediately mints and releases tokenized US stock assets of equivalent value to AP's encrypted wallet on the blockchain.
In contrast, traditional models require funders to prepare large amounts of cash upfront or assume high collateral, which is not only costly but also consumes a significant amount of liquidity. ITN's physical minting mechanism, however, compresses the entire time difference to the millisecond level, removing a fundamental obstacle to 24/7 on-chain liquidity supply.
Redemption: Reverse cancellation of on-chain tokens back to real shares
The mechanism operates in reverse. AP destroys tokenized US stocks on-chain. Upon receiving the on-chain event, the Alpaca system immediately activates the off-chain clearing system to transfer the equivalent amount of real US stocks held by the custodian issuer back to AP's account. The entire process requires no cross-system manual intervention or long waiting periods.
Cross-chain interoperability: breaking down the "island" barriers of assets
ITN's versatility allows it to support instant arbitrage and conversion between tokenized assets issued on different chains. When a token experiences a price discrepancy, traders can quickly redeem physical shares on that chain and then mint different tokens of the same value across chains, effectively helping the prices of different trading instruments in the market converge towards the actual value of the assets.
In essence, ITN is reorganizing the asset connection "circuit" between the traditional world and the crypto world, allowing real value to flow frictionlessly between two completely different financial systems.
Conclusion: The biggest "shovel seller" and the "elephant in the room"
As the wave of tokenized US stocks becomes one of the most important financial narratives spanning the next decade, Alpaca has undoubtedly become the biggest beneficiary of this wave. It's like a giant quietly selling shovels during a gold rush, not directly selling any products to end users, but controlling the underlying infrastructure of the entire sector.
For the entire crypto market, Alpaca's 94% market share is both an irreplaceable moat and a "Sword of Damocles" hanging over it.
If Alpaca's system experiences technical failures, hacker attacks, or service disruptions due to changes in US regulatory policies, billions of dollars worth of tokenized assets issued by platforms such as Binance, Kraken, and Ondo could face a collective crisis of liquidity depletion. When a "unified adapter" becomes the only connection channel, the entire system becomes a community of shared fate with that adapter.
