The Real Reason Behind Nasdaq's Bold "5×23" Bet: Racing Toward Perpetual Markets and the Tokenization Endgame

Trading US stocks used to mean sacrificing sleep. Soon, it might mean sacrificing weekends too.

While crypto markets have thrived on their 24/7 rhythm for years, traditional finance has finally woken up to the pressure. On December 15, Nasdaq took a decisive step by filing with the SEC to transform stock trading from the current 5-day, 16-hour window into a 5-day, 23-hour operation. The math is simple: Sunday 21:00 through Friday 20:00, with only a lone hour (20:00-21:00 daily) for system maintenance. The stated rationale sounds practical—meeting demand from Asian and European traders. But dig deeper, and you’ll discover something far more strategic: Nasdaq is orchestrating a controlled transition toward tokenized, always-on financial markets.

This isn’t an isolated trading-hours extension. It’s a carefully choreographed three-year roadmap, and December 2025 just marked another critical milestone.

The Infrastructure Squeeze: Why That Last Hour Matters So Much

On the surface, extending from 16 to 23 hours appears straightforward. Operationally, it’s anything but.

The current TradFi ecosystem operates like synchronized machinery. Brokers, clearing institutions (notably DTCC), regulators, and companies themselves form an intricate web. To support perpetual trading, every component must fundamentally change:

Operational overhaul across the board:

• Brokers must operate 24/7 customer service, risk management, and system maintenance, driving labor and infrastructure costs through the roof
• DTCC must completely restructure clearing and settlement protocols, now handling “next-day settlement for trades occurring 21:00-24:00” and extending coverage until 4 a.m.
• Listed companies must reprogram when earnings and announcements roll out, knowing instant market pricing now happens in real time—even at 3 a.m.

The market infrastructure wasn’t designed for this pace. Every component requires harmonization. Yet Nasdaq consciously chose 23 hours, not 24.

Why leave that final hour? The answer reveals the fragility of traditional systems. Under current centralized clearing (DTCC-based architecture), that closing hour serves as a critical “fault-tolerance window”—a moment for batch data processing, end-of-day reconciliation, margin settlement, and system integrity checks. It’s the equivalent of a bank reconciling its books after closing.

This 1-hour window is a necessary buffer in an infrastructure designed for slower, batched processes. Remove it entirely, and the entire system faces cascading operational risks.

Here’s the strategic insight: By holding firm on “5×23” rather than jumping to “5×24,” Nasdaq is conducting an extreme stress test on TradFi’s cross-institutional coordination. It’s pushing the current system to its absolute limit while stopping just short of breaking it. This is intentional—a proving ground for the architectural changes required for true perpetual settlement.

In contrast, blockchain-based tokenized assets inherently support 7×24×365 trading with atomic settlement via smart contracts. No end-of-day batching. No reconciliation windows. Pure continuous liquidity.

The Liquidity Sweep Problem: Benefits Masked by New Risks

The narrative around “5×23” benefits Asian traders enormously—no more midnight trading sessions to access US equities. True. But the market microstructure implications tell a more complicated story.

Current reality: After-hours and pre-market trading already show explosive growth. In Q2 2025, non-traditional-hours volumes exceeded 2 billion shares with $62 billion in turnover, representing 11.5% of all US stock trading—a record. Platforms like Blue Ocean and OTC Moon have captured a growing slice of this demand, fragmenting liquidity outside regulated exchanges.

What Nasdaq actually wants: Recapture those orders. Bring scattered night trading back into the centralized, regulated system.

What might actually happen: A liquidity sweep across time zones—real demand spread thinner over extended hours. During the new 23-hour window’s “night” portion, volumes will be thin. The consequences are measurable:

• Wider spreads and slippage: Institutional trades attempting execution during 2-4 a.m. EST face liquidity deserts. Slippage costs rise dramatically.
• Manipulation windows: Thinly traded periods become prime territory for predatory trading or flash crashes. Without the “digest overnight” buffer, surprise news hits an unprepared, fragmented market.
• Black swan amplification: Earnings shocks, regulatory announcements, or geopolitical events translate instantly into trading action with minimal counterparty liquidity. Gap moves and chain liquidations compound the damage.

The liquidity doesn’t vanish—it redistributes across time zones. That’s a hidden cost most participants haven’t fully priced in yet.

Nasdaq’s Master Strategy: Three-Year Blueprint Toward On-Chain Settlement

Zoom out, and the pattern becomes unmistakable. Nasdaq’s recent moves form a coordinated roadmap with a singular objective: enabling stocks to settle, circulate, and reprice like blockchain-native tokens.

Timeline of the strategy:

May 2024: US stock settlement officially shortened from T+2 to T+1. A seemingly incremental tweak, actually a critical infrastructure upgrade preparing systems for faster cycles.

Early 2025: Nasdaq publicly signals intention for around-the-clock trading, hinting at a second-half 2026 launch for “uninterrupted five-day services.”

Mid-2025: Behind the scenes, Nasdaq integrates blockchain technology into its Calypso system for 7×24-hour automated collateral and margin management. Institutional participants read the signal clearly: the back-end is going on-chain.

September 2025: Nasdaq formally files with the SEC to launch tokenized stock trading.

November 2025: Tokenization becomes Nasdaq’s explicit top strategic priority.

December 12, 2025: A watershed moment—DTCC’s subsidiary (Depository Trust Company) receives an SEC no-action letter approving real-world asset tokenization services in a controlled production environment, with official launch planned for H2 2026. This solves the compliance and custody challenges for on-chain settlement.

December 15, 2025: Nasdaq submits the 5×23-hour trading application to the SEC.

The synchronized dance:

• SEC: Loosening regulatory guardrails while officials like Paul Atkins publicly telegraph expectations: “Within about 2 years, all US markets will migrate on-chain and achieve on-chain settlement.”
• DTCC: Providing the foundational infrastructure (tokenization services, custody solutions, settlement protocols).
• Nasdaq: Charging forward with perpetual trading, tokenization launches, and ecosystem coordination.

This isn’t coincidence. This is orchestrated institutional alignment toward a single destination: the perpetual, on-chain financial system.

Why This Matters for the Broader Ecosystem

Once the 5×23 model becomes normalized, user expectations will inevitably escalate: Why the 1-hour gap? Why not weekend trading? Why can’t I settle T+0 or instantly with stablecoins?

TradFi’s incomplete, batched architecture will face its reckoning. Only tokenized assets natively supporting 7×24×365 trading, instant settlement, and continuous liquidity can close that final gap.

This is precisely why competitors—Coinbase, Ondo, Robinhood, MSX—are sprinting. The on-chain tide isn’t coming; it’s already here. Those moving slowly risk obsolescence.

The bottom line: Nasdaq’s 5×23 trading system isn’t a standalone reform. It’s a pressure test, a proof point, and a transitional waystation on the path to tokenized perpetual markets. The 1-hour gap Nasdaq deliberately preserved isn’t a constraint—it’s a countdown timer.