Hong Hao: Chain stocks promote global price discovery and reduce "vulnerability"

On July 31, at the Binance offline private event, regarding the topic of stock contracts such as Samsung Electronics, SK Hynix, Hyundai Motor, and other stock contracts on Binance, as well as global pricing trends of core assets, well-known economist Hong Hao said that exchanges 'lowering of the entry threshold for investors will help these assets be more open, the investor structure will be more diversified, price discovery will be more urgent and efficient, and reduce their vulnerability caused by closed and single-structure investors. "One of the core reasons for the long-term prosperity of U.S. stocks compared with other markets is capital openness." Hong Hao commented that it is "a good thing" that more assets can expand the user base nowadays. Hong Hao also pointed out that the value of a listed company is ultimately determined by its profitability, and the arbitrage mechanism in the global market will push prices back to uniformity. Unlike assets such as gold and Bitcoin that rely on market transactions to form prices, listed companies can continue to generate cash flow, so their value can be discounted through future earnings. Whether a company trades in South Korea, the United States or other markets, its intrinsic value does not change depending on where it is listed. "Arbitrage will continue to eliminate this spread and promote price convergence for the same asset in the global market." Talking about financial innovations such as on-chain stocks, Hong Hao believes that encryption technology is pushing global capital markets into the era of 24-hour on-chain trading, which essentially improves the efficiency of global price discovery and is also an important manifestation of financial innovation. He also pointed out that financial innovation and deregulation are two sides of the same coin, and historical experience shows that grand narrative, credit expansion and deregulation are three key factors necessary in the financial market boom cycle.