Gate Stock Tokens vs. Traditional Stock Brokers: How to Choose Your New Trading Arena?

Late at night, a programmer in Taipei is using the xStocks section of the Gate platform to buy Tesla tokens with USDT. At the same time, a trader in New York has just finished the regular trading session on NASDAQ and is preparing to rest.

Their actions seem similar but represent two completely different financial worlds—one is the 24/7 native crypto trading environment, and the other is limited by traditional market hours.

The core differences between these two stock investment paths are reshaping the global investment landscape. Traditional brokers like Firstrade, Interactive Brokers offer regulated, well-structured stock ownership services, while platforms like Gate launch stock tokens that emphasize round-the-clock trading, low entry barriers, and seamless integration of crypto assets.

01 Overview of Core Differences

There is a fundamental distinction in the intrinsic positioning of these two types of platforms. Traditional brokers provide stock trading that allows investors to directly own shares of listed companies, enjoying dividends and voting rights.

In contrast, Gate’s stock tokens are blockchain tokens linked to stock prices, enabling investors to track and participate in stock price fluctuations without actual ownership of shares.

This essential difference leads to a series of practical operational experiences. Starting with the most basic trading hours, traditional stock trading follows strict market hours (9:30-16:00 Eastern Time in the US), which need to be converted to Beijing time, adjusting for daylight saving time.

Gate’s stock tokens completely break this limitation, offering 24/7 trading, allowing investors to respond to market changes at any time.

Traditional stock markets use T+1 settlement (changing from T+2 to T+1 starting May 2024), meaning settlement occurs one day after the trade. In Gate’s blockchain system, transactions are almost instant settlement, significantly improving capital efficiency.

02 Trading Thresholds and Capital Efficiency Comparison

Entry barriers are among the most concerned factors for ordinary investors. While traditional brokers like Firstrade, Charles Schwab promote “zero commissions,” there are often hidden thresholds.

For example, SogoTrade waives commissions only for orders exceeding $2,000 per share, otherwise charging $2.88 per trade. International investors also need to consider foreign exchange conversion costs, typically 0.25%–0.3% spread fees.

In comparison, Gate’s stock tokens settle in USDT, allowing users to trade directly with stablecoins, bypassing traditional foreign exchange processes. This means no worries about foreign exchange controls and no additional currency conversion fees.

For investors with limited funds, traditional brokers require enough capital to buy at least one share of stock. With Tesla’s current price around $1,000 per share, just buying one share requires $1,000. On the Gate platform, thanks to blockchain’s divisibility, investors can buy fractional parts of stock tokens with minimal funds, achieving true fractional investing.

03 In-Depth Fee Structure Analysis

Fees are the hidden killers of investment returns. Traditional stock brokers appear to have “zero commissions,” but in fact, there are multiple hidden costs:

Inactive account fees (charged by some brokers), wire transfer fees (usually $10–$50), platform usage fees, etc.

More complex is dividend tax handling—non-US investors must pay a 30% withholding tax on dividends, which can be reduced to 10% under US-China tax treaties but requires proactive application.

Gate’s stock tokens have a relatively transparent fee structure. Since they do not involve actual stock ownership, there are no dividend tax issues. The main charges are trading fees and potential withdrawal fees, all clearly listed in user agreements.

This transparency is especially friendly to international investors who dislike complex tax reporting. In traditional stock investing, residents of different countries face various tax declaration requirements, such as Mainland China residents submitting W-8BEN forms, Canadian residents reporting overseas assets to CRA, etc. Gate’s stock tokens simplify this process.

04 Trading Features and Flexibility

Traditional stock brokers excel in trading tools. Interactive Brokers supports trading in stocks, ETFs, options, futures, bonds, forex, and over 150 global markets, with algorithmic trading tools favored by professional investors.

TD Ameritrade’s Thinkorswim platform offers powerful technical analysis tools and simulated trading. However, these platforms are often complex to operate and not very friendly to beginners.

Gate focuses on the needs of crypto-native users, offering unique perpetual contracts for stock tokens with up to 10x leverage. This is a feature traditional brokers cannot provide.

Additionally, Gate allows two-way trading—whether the market rises or falls, investors have profit opportunities, whereas traditional brokers impose many restrictions on short selling.

Liquidity and market depth are also key considerations. Traditional stock markets are highly liquid, especially for large-cap stocks traded on major exchanges.

The liquidity of Gate’s stock tokens depends on crypto market participants, which is growing but still lags behind NYSE or NASDAQ. However, Gate is building a unique liquidity ecosystem through multi-chain support and integration with mainstream DeFi protocols.

05 Security, Regulation, and Asset Protection

Security and regulation are core advantages of traditional brokers. US brokers are strictly regulated by the SEC and FINRA, with customer funds protected by SIPC insurance, with coverage up to $500,000.

As a crypto exchange, Gate’s regulatory framework is still evolving. It supports stock tokens backed by 1:1 asset reserves—each token is collateralized by actual stocks held by regulated third-party custodians.

From the asset ownership perspective, investors in traditional brokers are the legal owners of the stocks, enjoying full shareholder rights. Gate’s stock token holders own digital assets tracking stock prices, without voting rights or other corporate governance rights.

This distinction determines the suitable scenarios for each product: traditional stocks are better for long-term value investing, while stock tokens are more suitable for short-term price speculation and hedging.

06 Future Outlook and Investment Recommendations

As the tokenization of real-world assets (RWA) accelerates, the boundary between traditional finance and crypto finance is becoming blurred. Citigroup predicts that by 2030, $4 trillion to $5 trillion of assets will be tokenized.

SEC Chair Gary Gensler also acknowledges that “stock tokenization is an innovation,” and has led seminars to try to establish regulatory blueprints for this field.

Recommendations for different types of investors:

• Long-term value investors: suitable for traditional brokers, enjoying shareholder rights and stable regulation
• Crypto-native traders: Gate stock tokens offer seamless crypto asset conversion and flexible trading strategies
• International investors (especially from countries with strict foreign exchange controls): Gate’s USDT settlement bypasses traditional forex barriers
• Small investors: Gate’s fractional investing lowers the capital threshold for stock market participation
• 24/7 traders: Gate’s round-the-clock trading meets the needs of non-traditional trading hours

Future Outlook

When the Taipei programmer completes his Tesla token trade, he holds not just a string of code but a future investment certificate blending traditional and innovative financial systems. These tokens can be viewed anytime in a crypto wallet and even used as collateral in DeFi protocols to earn additional yields.

He doesn’t need to wait for Wall Street to open, worry about foreign exchange controls, or calculate complex tax filings. All he needs to do is connect to the internet from anywhere in the world and make trading decisions. Does this mean traditional brokers will soon be replaced? Not necessarily.

Both models will coexist in the foreseeable future, serving different needs and risk preferences. But it’s undeniable that crypto platforms represented by Gate are redefining the connotations and extensions of “stock investment” at an unprecedented speed and manner.