Illiquidity
The condition of not being able to easily sell CRTs. During the mandatory 12-month holding period, CRTs are illiquid. Even after, liquidity on the Secondary Market is not guaranteed.
Understanding Illiquidity
Illiquidity refers to the inability to quickly or easily convert an investment into cash without a potentially significant loss in value. In the context of Channel Revenue Tokens (CRTs) on GigaStar, illiquidity is one of the most important risk factors for Investors to understand before committing capital.
Under SEC Regulation CF, CRTs are subject to a mandatory 12-month holding period from the date of purchase. During this period, Investors generally cannot sell or transfer their tokens. This means that capital invested in CRTs is locked up for at least one year, regardless of changes in the Investor's financial circumstances or the Creator's channel performance.
After the holding period expires, CRT holders may have the opportunity to sell their tokens on the GigaStar Secondary Market, an alternative trading system operated by GigaStar Securities. However, the ability to sell is not guaranteed. Secondary market trading depends on there being a willing buyer at an acceptable price. If no buyers are available, or if the bid prices are significantly below what the holder paid, the CRT may effectively remain illiquid even after the holding period ends.
Several factors influence CRT liquidity on the Secondary Market. Trading volume, the number of active market participants, the Creator's current performance and popularity, and overall market conditions all play a role. CRTs for well-known Creators with strong revenue histories may attract more trading interest than those for smaller or newer channels.
Investors should treat CRT investments as long-term commitments and should not invest funds they may need to access in the near term. The speculative nature of CRTs, combined with potential illiquidity, means that Investors should be prepared for the possibility that they may not be able to sell their tokens when they want to, or at a price they consider favorable.
Key Points to Remember
- Illiquidity is regulated by the SEC under Regulation Crowdfunding
- All investments carry risk — past performance doesn't guarantee future results
- Review all offering documents carefully before investing
Related Terms
Channel Revenue Token (CRT)
A digital asset that represents a percentage of a YouTube channel’s future revenue. A CRT becomes tradable in the secondary market after a 12-month holding period from its initial purchase.
GigaStar Secondary Market
GigaStar Trading is GigaStar's upcoming SEC-registered Alternative Trading System (ATS), where CRT holders may buy and sell their positions, launching in 2026.
Holding Period
The mandatory 12-month period after purchasing CRTs during which they cannot be resold on the Secondary Market, as required by SEC regulations.
Liquidity
Liquidity is the ability to buy or sell CRTs. CRTs are illiquid during the 12-month holding period. GigaStar Trading may provide liquidity, but does not assure it.
Risk Factors
Risk factors are the specific risks associated with investing in CRTs, including Creator performance risk, platform risk, illiquidity, and the potential for total loss of investment.
Secondary Trading
Secondary trading is the buying and selling of Channel Revenue Tokens (CRTs) on the GigaStar Secondary Market after the mandatory 12-month holding period has elapsed.
Speculative Investment
An investment with high risk and uncertain outcome. CRTs are speculative—Investors may lose their entire investment and should invest accordingly.
Frequently Asked Questions
What is the GigaStar secondary market?
The GigaStar secondary market platform, called GigaStar Trading, is an SEC-registered digital Alternative Trading System (ATS) that allows eligible investors to buy and sell previously issued Channel Revenue Tokens (CRTs) with other investors after the initial offering period and any applicable restricted period, subject to securities regulations and platform rules. (e.g., Reg CF = 12-month restricted holding period). This secondary market platform enables peer-to-peer trading of existing CRTs. Note that Investment offerings are speculative, illiquid, and involve a high degree of risk, including the risk of loss of your entire investment. Securities purchased in GigaStar Market must be held 12 months before trading in the secondary market. There is no guarantee of an active or liquid secondary market and investments are subject to market risk and will fluctuate in value. Past performance is not a guarantee of future results.
How is the secondary market different from GigaStar Market?
GigaStar Market (Primary Market) is an SEC-registered Funding Portal and member of FINRA that offers securities under a Regulation Crowdfunding (Reg CF) platform. This is the primary marketplace where Channel Revenue Tokens (CRTs) are first issued and sold directly to investors to fund a Creator. GigaStar Trading (Secondary Market) is an SEC-registered broker-dealer (BD) operating a digital Alternative Trading System (ATS) for the trading of Digital Asset Securities. This is a secondary market trading venue separate from the primary market, where eligible investors may buy and sell CRTs with one another. Primary offerings raise capital for Creators. Secondary trading allows existing investors to trade CRTs, transferring ownership, subject to market availability. NOTE: Investment offerings are speculative, illiquid, and involve a high degree of risk, including the risk of loss of your entire investment. Securities purchased in GigaStar Market must be held 12 months before trading in the secondary market. There is no guarantee of an active or liquid secondary market and investments are subject to market risk and will fluctuate in value. Past performance is not a guarantee of future results.
What assets can be traded?
Eligible Channel Revenue Tokens (CRTs) that were issued in primary offerings, have satisfied applicable holding requirements (12-month holding period from initial purchase) and meet platform eligibility standards can be traded on the GigaStar Trading platform.