How to Buy Tokenized Stocks with Bitcoin: A Step-by-Step Guide
Learn how to convert Bitcoin to stablecoins and use them to buy tokenized US-listed stocks on GM Markets, a self-custodial platform with 1:1 backing and transparent fees.
How to Buy Tokenized Stocks with Bitcoin: A Step-by-Step Guide
Bitcoin holders increasingly seek pathways to diversify their portfolios with exposure to traditional equity markets. Tokenized stocks offer a direct, on-chain method to achieve this. At GM Markets, we provide a self-custodial and efficient platform for accessing tokenized US-listed stocks and ETFs by using stablecoins as an intermediary. Our platform is built on tokenization rails operated by Flo (flo.finance). This approach brings the utility of on-chain assets to global equity market access. GM Markets is currently in public beta. While core functionalities are fully operational, some aspects of the platform are still evolving. Please note: GM Markets does not offer its product or services to users in the United States or other restricted jurisdictions. This guide outlines the process of converting Bitcoin into stablecoins and subsequently using them to trade tokenized US-listed stocks on our platform, leveraging our first-party expertise in making tokenized assets accessible.
Understanding Tokenized Stocks and GM Markets' Approach
Tokenized stocks are on-chain representations of traditional equities. Each token is backed 1:1 by a real share held in a segregated customer account at a regulated broker-dealer, such as Interactive Brokers or Alpaca Markets. This structure means you gain the economic exposure of the underlying stock, including price movements and dividends, which are reflected through a total-return model that increases the token’s on-chain Net Asset Value. All trades benefit from on-chain settlement and the inherent advantages of digital assets, including fractional ownership down to six decimal places, with trades starting from a minimum of $1.
Bitcoin holders are increasingly seeking tokenized stocks for several reasons. Diversification is a primary driver, allowing investors to spread risk beyond a single asset class. Access to global equity markets, particularly US-listed stocks and ETFs, provides opportunities that might otherwise be geographically or infrastructurally restricted. Furthermore, the DeFi composability of these ERC-20 tokens is a significant advantage, enabling them to be used across various decentralized finance protocols for lending, borrowing, or providing liquidity.
Converting your Bitcoin to stablecoins, such as USDC or USDT, is a necessary intermediary step before depositing funds onto platforms like GM Markets. This ensures a stable and efficient medium for on-chain trading.
Converting Bitcoin to Stablecoins: The Initial Step for Tokenized Assets
The conversion of Bitcoin to USDC or USDT is your essential first step towards investing in tokenized stocks. There are several methods available, each with its own considerations:
Centralized Exchanges (CEXs)
Leading centralized exchanges like Binance and Coinbase offer high liquidity for BTC to stablecoin conversions. These platforms typically use a maker-taker fee model; for example, Binance's standard spot trading fees are often around 0.1% for both makers and takers, while Coinbase's conversion fees can incur a spread of up to 2.00%, though Coinbase Advanced offers lower fees. Fees can often be reduced by using native exchange tokens or achieving higher trading volumes through VIP tiers. Crypto deposits are generally free, but withdrawal fees vary by cryptocurrency and network conditions. For instance, a Bitcoin withdrawal on Binance costs approximately 0.0002 BTC, while USDT withdrawals on the TRC20 network are around 1 USDT. Centralized exchanges require Know Your Customer (KYC) and Anti-Money Laundering (AML) verification, which involves verifying your identity and understanding transaction purposes, in line with global guidelines from the Financial Action Task Force (FATF).
Decentralized Exchanges (DEXs)
Decentralized exchanges like Uniswap offer permissionless trading for wrapped Bitcoin (wBTC) to stablecoin pairs. Uniswap v3 offers tiered fees, typically 0.01% or 0.05% for stablecoin pairs. In addition to swap fees, users incur blockchain network fees, commonly referred to as gas fees, which can fluctuate based on network congestion. DEXs do not require KYC/AML verification, aligning with their permissionless nature.
Funding Your GM Markets Account with Stablecoins
Once you have converted your Bitcoin to stablecoins (USDC or USDT), depositing them into your GM Markets account is a straightforward process. Our platform supports deposits via stablecoin on several chains, including Base, Arbitrum, Ethereum, and Optimism. Upon deposit, your stablecoins are unified into USDF, our internal stablecoin balance, which is backed 1:1 by USDC and USDT across these chains.
A key feature of GM Markets is gas abstraction. This means you do not need to hold native chain tokens (like ETH for Ethereum or Arbitrum) to pay for transaction fees. Our smart account pays the native gas, and the equivalent amount is billed in USDC/USDF from your balance. This simplifies the trading experience by removing the need to manage multiple native tokens for gas, allowing you to focus solely on your tokenized stock trades.
Buying Tokenized Stocks on GM Markets: A Step-by-Step Process
After your stablecoins are deposited and converted to USDF, purchasing tokenized US-listed stocks on GM Markets is an intuitive process designed for efficiency and transparency.
Step 1: Select Your Asset
Navigate to the trading interface on GM Markets. You will see a list of available tokenized US-listed stocks and ETFs. As of a recent capture, these include prominent assets such as AAPL, NVDA, MSFT, TSLA, GOOGL, META, AMD, TSM, SPY, VOO, and QQQ. Select the desired asset you wish to trade. Remember, trades can be initiated with a minimum of $1, and tokenized stocks are fractional to six decimal places, allowing for precise exposure.
Step 2: Review Your Quote
GM Markets employs a Request-For-Quote (RFQ) execution model. When you indicate your intention to buy, regulated market-making partners provide a real-time quote against the live underlying market. This quoted price is comprehensive, as it already includes our single trading fee, which ranges from 10 to 20 basis points (0.10% to 0.20%). The default fee is 20 bps, decreasing to 10 bps at VIP 5 based on your 14-day trading volume, as detailed on our pricing page. The "You will receive" line in the trade interface represents the final amount you will acquire. You can also configure your slippage tolerance per trade, with a default of 0.5%. If the market moves beyond this tolerance during the quote window, the trade will not execute, and a new quote will be issued to protect your order.
Step 3: Confirm and Settle
Once you are satisfied with the quote, confirm your trade. The transaction then settles transparently on-chain across your chosen network (Base, Arbitrum, Ethereum, or Optimism). For orders placed outside of traditional market hours, they are queued on-chain and are filled when liquidity becomes available or the market opens. Trades and withdrawals exceeding $10,000 trigger a second-factor confirmation for added security.
Step 4: Manage Your Tokenized Portfolio
Your newly acquired tokenized stocks reside in your embedded wallet, which is operated by Privy using multi-party computation (MPC). This means no single party, including GM Markets, holds the complete private key; it is reconstructed from shares only at signing, on your device, ensuring self-custody and enhanced security through biometric or passkey authentication. These ERC-20 tokens are fully composable, allowing you to lend, borrow against, or provide liquidity across various DeFi protocols. Dividends are reinvested to raise the token's on-chain NAV, and corporate actions are absorbed into NAV, ensuring your economic exposure tracks the underlying asset precisely.
The GM Markets Advantage: Security, Transparency, and Composability
Our commitment to security and transparency is foundational. Every tokenized stock on GM Markets is backed 1:1 by a real share held in a segregated customer account at regulated broker-dealers. Our reserves are independently attested in real time by Accountable, a third-party proof-of-reserves provider, with the live backing ratio verifiable on our Proof of Reserves page. The use of Privy MPC wallets ensures your assets remain self-custodial, securing your digital holdings with advanced cryptographic techniques. Our smart contracts have undergone audits by leading firms including Sherlock, Halborn, Cantina, and Cyfrin, further strengthening our security posture. Our total-return NAV model for dividends and corporate actions simplifies management by automatically reflecting value increases in your token's price, rather than separate payouts. Furthermore, a designated security agent works to ensure continuity. If GM Markets discontinues operations, this agent works with the custodian to redeem outstanding tokens against the underlying shares. This redemption path is enforced by the on-chain contract, independent of GM Markets, and assets remain in segregated accounts, not on GM Markets' balance sheet.
The composability of our ERC-20 tokens across DeFi protocols like Aave, Morpho, Uniswap, Curve, and CoW Swap provides additional utility for your equity exposure, allowing it to be used as productive capital. However, it is important to understand that markets can move against you, you may lose money, and tokenized stocks carry settlement, counterparty, smart-contract, and custody risk. For full details, please review our risk and legal page. GM Markets does not provide financial, investment, tax, or legal advice.
Frequently Asked Questions
What is a tokenized stock on GM Markets?
A tokenized stock on GM Markets is an on-chain representation of a traditional US-listed equity or ETF. It is fully backed 1:1 by a real share held in custody on your behalf by a regulated broker-dealer, providing the same economic exposure as the underlying asset. It resides in your self-custodial wallet and is composable across DeFi. For more information, visit our tokenized stocks learning page.
How are my assets protected?
Your underlying shares are held in segregated customer accounts at regulated US broker-dealers, separate from their own funds. Reserves are independently attested on-chain in real time by Accountable. Your digital tokens are secured in an embedded Privy MPC wallet, where no single party holds your full private key. Learn more on our security page.
What are the total fees on a trade?
GM Markets charges a single trading fee ranging from 10 to 20 basis points (0.10% to 0.20%), included in the quoted price. Deposits and withdrawals are free, and gas fees are abstracted and billed in USDF from your balance, eliminating the need to hold native chain tokens. Our pricing page provides full details on our VIP tiers and fees.
Do I receive dividends?
Yes, you receive the economic benefit of dividends. Rather than a separate cash payout, dividends are reinvested into the underlying shares, which in turn increases the token's on-chain Net Asset Value (NAV). Your token's price reflects this increase, maintaining precise economic exposure to the underlying asset. Our FAQ section provides more details.
Can I use these tokens in DeFi?
Yes, a core advantage of tokenized stocks on GM Markets is their composability. As standard ERC-20 assets, they can be lent, borrowed against, supplied as liquidity, or used as collateral across various decentralized finance protocols like Aave, Morpho, Uniswap, Curve, and CoW Swap.
Conclusion: Accessing Global Equities with GM Markets
Buying tokenized stocks with Bitcoin through GM Markets provides a direct and efficient method to integrate your crypto portfolio with traditional US-listed equities. By converting Bitcoin to stablecoins, funding your account, and following our clear trading process, you gain access to fractional shares, transparent fees, and on-chain settlement. Our platform prioritizes security through 1:1 backing, segregated custody, real-time proof of reserves, and self-custodial MPC wallets, all while abstracting complex blockchain mechanics like gas fees. Explore the possibilities of diversified, composable equity exposure. Please remember: GM Markets does not offer its product or services to users in the United States or other restricted jurisdictions. All trading involves risk, and you may lose money.
