A new "CoinShares Hybrid Finance Q1 2026 Report," co-authored with on-chain data platform Token Terminal, reveals that the tokenized stock market experienced an extraordinary 2,697% year-over-year growth in market capitalization. The report, shared by Token Terminal on social media, highlights 2026 as a pivotal year where Hybrid Finance transitions from a theoretical concept to a measurable market structure. This significant surge underscores the accelerating convergence of traditional capital markets and on-chain rails into a unified financial system.
CoinShares, Europe's largest digital asset investment firm, defines Hybrid Finance as the "intersection of three structural forces: settlement infrastructure capable of carrying real economic weight; the tokenisation of traditional assets including treasuries, equities, and commodities; and user-facing on-chain applications generating real, recurring revenues." The report emphasizes that these are not speculative categories but measurable and growing segments. It aims to provide a consistent analytical framework to track this development quarterly.
Beyond tokenized stocks, other segments within Hybrid Finance also demonstrated robust growth. Tokenized funds reached $9.0 billion in assets under management (AUM) in Q1 2026, marking a 181.3% increase year-over-year. This growth is largely fueled by tokenized strategies backed by short-duration US Treasury instruments, with issuers like BlackRock and Franklin Templeton playing a significant role. Tokenized commodities, primarily gold-backed tokens from Tether and Paxos, grew to $4.9 billion in market capitalization, a 350% increase from a year prior.
The stablecoin market, a foundational layer of Hybrid Finance, reached $297.6 billion in on-chain market capitalization during Q1 2026, representing a 37.2% year-over-year increase. Issuers such as Tether, Circle, and Sky dominate this segment, with approximately 60% of stablecoins issued on Ethereum. On-chain businesses, a new category generating revenue directly from blockchain activity, recorded $587.9 million in Q1 revenue, with trading platforms like Hyperliquid leading the charge.
The report concludes that revenue and economic value in Hybrid Finance are generated first by on-chain businesses, then by asset issuers, and finally by the underlying chains. Hyperliquid is cited as a prime example of successful vertical integration, capturing value by combining its own Layer 1 infrastructure with a decentralized derivatives exchange. Token Terminal, founded in 2020 in Helsinki, contributes its expertise in transforming raw blockchain data into institutional-grade intelligence for this comprehensive analysis.
