Gemini Expands into Tokenized Stocks on Arbitrum

In a groundbreaking move, Gemini has launched tokenized stocks for European Union traders, starting with a tokenized version of MicroStrategy (MSTR) on the Arbitrum network. This initiative, announced on June 27, 2025, marks the beginning of Gemini’s ambitious plan to bring tokenized U.S. equities to blockchain networks, aiming to democratize access to traditional stock markets.

Gemini’s partnership with the tokenization platform Dinari allows users to purchase fractional shares of MicroStrategy as on-chain tokens. These tokens are backed by real securities, providing investors with the benefits of blockchain technology while maintaining exposure to traditional assets. Initially available on the Arbitrum (ARB) network, Gemini plans to expand this offering to additional blockchain networks in the near future.

The launch of MSTR tokens on Arbitrum is part of Gemini’s broader strategy to combine the 24/7 liquidity and accessibility of crypto markets with traditional equities. “Anyone in the world with a smartphone and an internet connection can gain access to tokenized U.S. equities like MSTR on the blockchain,” Gemini highlighted in its announcement. The company aims to introduce more tokenized stocks and exchange-traded funds (ETFs) in the coming days, positioning this product as a means to “export U.S. equities across the globe” and enable truly borderless finance.

Arbitrum’s Role in the Tokenized Stock Market

Arbitrum, a Layer-2 scaling solution for Ethereum, plays a crucial role in this new venture. As of June 27, 2025, Arbitrum’s close price stood at $0.311785, with a market cap of approximately $1.53 billion. Despite a significant drop from its 52-week high of $1.2379 in December 2024, Arbitrum remains a key player in the Layer-2 space, known for enhancing Ethereum’s scalability.

The introduction of tokenized stocks on Arbitrum underscores the network’s potential to facilitate innovative financial products. However, the Layer-2 token market, including Arbitrum, faces scrutiny over its valuations. A recent analysis by Ignas on X highlights the disparities in fees generated by various L2 projects. Arbitrum One leads with $19.5 million in annual fees, while competitors like zkSync and Starknet earn significantly less, reflecting the uneven scale and adoption among L2 projects.

Valuation Concerns in the Layer-2 Market

The valuation of Layer-2 tokens, including Arbitrum, has raised concerns about their true value. Ignas’s analysis reveals stark differences in the Fully Diluted Valuation (FDV) to fees ratio among L2 projects. Arbitrum’s ratio stands at 137.8x, while Starknet’s is an astonishing 4,204x. These figures prompt questions about the sustainability and justification of such high valuations in the L2 token market.

As the Layer-2 space continues to evolve, with fierce competition from existing projects and newcomers like INK, the potential for both opportunities and significant risks looms large. Vitalik Buterin’s new Ethereum roadmap, focusing on enhancing the security, finality, and scalability of Layer 2 solutions, aims to address some of these challenges.

In conclusion, Gemini’s launch of tokenized stocks on Arbitrum represents a significant step towards integrating traditional finance with blockchain technology. While the move offers exciting possibilities for investors, it also highlights the need for careful consideration of the valuation and sustainability of Layer-2 projects in the rapidly evolving crypto landscape.