Binance was hacked, and many people used this as a reason to aggressively open short positions. Based on past cases where exchanges suspended withdrawals, assets on the exchange should trade at a discount—the coins can’t get out, so liquidity dries up.
The reality: 36 hours later, Binance’s offshore premium was +3.65bp, with 23 of 38 assets more expensive. But the premium was entirely in the long tail:
PEPE +61.7bp,
PENDLE +47.8,
ENA +26.8;
ETH +4.0,
BNB +4.7,
DOGE +4.5,
Those are no different from the usual price spreads versus offshore markets. This isn’t a trust premium; it’s a dammed-up lake. People who can’t withdraw can only switch positions on the exchange, bidding up long-tail assets.
The reality: 36 hours later, Binance’s offshore premium was +3.65bp, with 23 of 38 assets more expensive. But the premium was entirely in the long tail:
PEPE +61.7bp,
PENDLE +47.8,
ENA +26.8;
ETH +4.0,
BNB +4.7,
DOGE +4.5,
Those are no different from the usual price spreads versus offshore markets. This isn’t a trust premium; it’s a dammed-up lake. People who can’t withdraw can only switch positions on the exchange, bidding up long-tail assets.
