S&P 500 dominance faces a challenge from tokenization, Visser says

Fast-growing private businesses and asset tokenization could reshape capital markets centered on publicly traded companies. Companies may have less need to raise funds through public markets, while assets that are difficult to trade could become more liquid.

In a November 5 interview with Natalie Brunell, Jordy Visser said the S&P 500 was approaching the end of its dominance. His argument extended beyond the index to public companies more broadly, with tokenization potentially accelerating the shift.

Visser said private companies were expanding rapidly while increasingly able to finance themselves without accessing public capital markets. Tokenization and programmable money could make raising capital and distributing ownership easier, he argued.

He cited his own content business as an example, explaining that he wanted its community to share ownership. People who benefit from its educational content could also participate in the business's success and help expand its audience. Programmable money could enable that arrangement, he said.

Regulatory uncertainty remained a consideration. Visser said he was still cautious about how the new administration would approach tokenization and programmable money, although his concerns were diminishing.

Visser also challenged the argument that money supply growth alone explained stock market gains. He said the S&P 500 had risen by a substantially greater multiple than the money supply since the global financial crisis. In his assessment, returns to capital were increasing as the divide between labor and capital widened.

He argued that tokenization's implications extended beyond corporate financing to existing assets. Noting that definitions of M2 differ across countries, Visser estimated global currency at roughly $120 trillion to $150 trillion and assets at close to $1 quadrillion. Making illiquid assets tradable was central to his view of how tokenization could change capital markets.