Premiums can be arbitraged but require mechanisms that many ...

Premiums can be arbitraged but require mechanisms that many hype vehicles lack

Jeff explains that without a built‑in arbitrage mechanism, premiums can persist and eventually collapse.
He compares the situation to GBTC, where a large premium persisted until market forces corrected it.
The lack of a redemption mechanism means investors can be stuck with over‑priced tokens.
This risk underscores the need for transparent, liquid secondary markets for such vehicles.

Jeff PersUnchained00:52:20

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“If the vehicle gets big it's going to trade at a huge premium to NAV, kind of like GBTC style trade.” — Jeff Pers

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“There will be a huge premium to NAV, and if there's no mechanism to arbitrage it, the price can stay inflated for a while.” — Jeff Pers

The panel discusses on-chain "hype" vehicles that trade at premium to NAV, their similarity to GBTC, and the risks they pose for market stability.

“Retail orders are internalised and rarely hit the exchange, giving brokers and market‑makers the profit”

“Meme‑stock rallies gave retail traders a louder voice, but institutional participants still dominate price formation”

“Institutions value retail participation because it generates fee revenue (PFOF) and keeps markets liquid”