Robinhood’s tokenized AMC product briefly traded far above the actual AMC stock price over the U.S. Labor Day weekend. The unusual move has raised a bigger question: can trading on Robinhood Chain create enough demand to affect real stock prices?
Robinhood Stock Tokens give investors economic exposure to a stock, but they do not give them ownership or voting rights in the company. IOSG researcher Mario Chow said the supply of the token linked to AMC grew nearly 19 times as traders moved in after the token began trading at a large premium.
AMC shares also moved higher in premarket trading, although researchers could not determine exactly how much of that move came from buying linked to the token.
The key point is that these tokens can be created and redeemed. That means a large price gap can attract arbitrage traders who may create more tokens and sell them, helping push the token price back toward the actual stock price.
The unusual premium happened while the U.S. stock market was closed. That temporarily limited the normal process used to create new tokens and gave the token price room to move sharply.
According to Chow, the AMC-linked token reached $18.04 on Sept. 7 after AMC shares had closed at $2.54 on Sept. 3. AMC later jumped as much as 22% in premarket trading before giving back most of those gains.
The episode shows how a large onchain premium can create demand for the related shares when an authorized participant creates more stock tokens. But it does not prove that token trading caused AMC’s entire price increase.
It also does not mean Robinhood can create an unlimited number of AMC tokens. The system allows token supply to grow or shrink through creation and redemption. The process still depends on the product’s legal rules, available collateral, market access and operational procedures.
There is another important point: Robinhood’s stock tokens are not the same thing as AMC shares.
Robinhood describes its Stock Tokens as tokenized debt securities issued by Robinhood Assets (Jersey) Limited. They are designed to follow the economic performance of certain U.S. securities, but they do not give holders direct ownership of those securities.
That means someone holding the AMC token cannot vote as an AMC shareholder or make ownership claims against AMC.
Robinhood’s 2026 quarterly filing also describes the Stock Tokens as debt securities issued by its Jersey affiliate. The company has warned about regulatory, legal, operational and reputational risks connected to making these products available through Robinhood Wallet.
The products are not registered under U.S. securities laws and cannot be offered to U.S. persons. Eligible investors in certain jurisdictions can trade and transfer them through wallets, centralized exchanges and decentralized applications.
This difference is also why AMC CEO Adam Aron objected to the product. Aron said AMC had not approved or taken part in the token. He strongly criticized the product and said the company had brought in outside securities lawyers.
Robinhood rejected AMC’s request to stop offering the token. The company has argued that it can continue offering the product without AMC’s approval because the instrument is a Robinhood-issued debt security, not an AMC share.
The meme coins connected to the activity are a separate matter. Robinhood did not create $MEME, $CINEMA or $BONER. Independent developers launched those tokens and their liquidity pools on Robinhood Chain, an Ethereum-compatible permissionless network. Some of these pools use Robinhood Stock Tokens as the trading asset.
IOSG tracked creation and redemption activity for the AMC-linked token and estimated that its supply grew from 152,106 tokens to about 2.90 million in just three days.
The researcher counted around 3.05 million newly created tokens and about 310,000 redeemed tokens. That resulted in a net increase of roughly 2.74 million tokens.
Because each token is designed to track the economics of one share, creating additional tokens may require the participating intermediary to gain matching exposure to the underlying stock. Robinhood says the assets supporting its Stock Tokens are held through regulated financial institutions, although token holders do not directly own those assets.
IOSG estimated that around $7.6 million worth of actual AMC shares were purchased as the token supply grew. The research suggested those purchases could have represented as much as 7.6% of trading during the busiest premarket period.
However, those numbers are external estimates based on blockchain activity and market data. Robinhood has not confirmed the $7.6 million figure. It also has not publicly identified the authorized participant or released a transaction-by-transaction record showing the related AMC purchases.
AMC shares did move during the same period. According to the IOSG analysis, the stock climbed from $2.54 at the Sept. 3 close to around $3.11 in early premarket trading on Sept. 4. It later dropped back and finished near $2.65.
The timing suggests that some buying pressure may have reached the real stock market. But timing alone does not prove how much of the move came from token creation. News about AMC, speculative trading and normal premarket activity could also have played a role.
AMC shares were also reported to have gained around 21% during the public dispute. No official filing has said that the move was caused by activity on Robinhood Chain.
The structure of these tokens also makes a lasting short squeeze harder.
A traditional short squeeze happens when there are limited shares available and short sellers are forced to buy shares back. That extra demand can push the price higher, which can force even more short sellers to cover.
GameStop showed how extreme this can become. An SEC staff report found that GameStop’s short interest reached 122.97% of its public float in January 2021. AMC’s short interest was much lower at 11.4%.
On Jan. 28, 2021, Robinhood and other brokers restricted purchases of both stocks. Robinhood later said its restrictions were linked to clearinghouse deposit requirements and liquidity pressures.
The current stock-token system works differently.
If a token trades well above the value of the stock it tracks, an authorized participant can potentially obtain exposure to the stock, create additional tokens and sell them while the premium remains.
That extra supply reduces scarcity. As more tokens enter the market, the opportunity to profit from the price gap also becomes smaller. This can push the token back toward the value of the underlying stock instead of creating the kind of self-reinforcing demand seen in a traditional short squeeze.
Redemption can work in the opposite direction. If a Stock Token trades below the value of the reference stock, eligible intermediaries may buy and redeem the tokens. This reduces supply and can help unwind the related market hedge.
IOSG saw a similar increase in Robinhood’s tokenized Hims & Hers product. Its supply reportedly grew from just 468 tokens around the launch of the $BONER market to 130,876 tokens.
The findings suggest that meme-coin activity can send some demand toward tokenized stocks and potentially into the real shares. But they do not show that onchain traders can permanently remove large amounts of actual stock from the market.
Creating more stock tokens does not increase the number of AMC shares outstanding. It simply increases the number of Robinhood debt instruments that provide economic exposure to AMC.
Another issue appears when the stock market closes.
Token markets can continue trading while the U.S. stock market is shut. But the process for creating new tokens may not work normally during weekends and holidays because authorized participants need access to stock markets, custody services and settlement systems.
This can create a temporary gap between the token price and the actual stock price. With fewer traders and less liquidity, the token can move far above or below the last available stock price.
IOSG said the AMC token’s jump to $18.04 was partly caused by this timing problem. The move happened after the U.S. market had closed and before intermediaries could respond through the normal creation process.
When premarket trading opened, the gap started to close. The actual AMC share price initially moved higher while the token price fell. By shortly before the regular market opened, both were reportedly trading around $2.61 to $2.62.
This shows that the token itself can experience a short-lived squeeze when new token creation is not available. But that does not mean the same price move will automatically happen in the underlying stock.
The amount of existing token supply also matters. After the AMC token supply reached about 2.90 million, IOSG saw smaller price differences during the next market closure. With more tokens available, it became harder to create another extreme premium.
The risk can be higher for newly launched tokens with small supplies, limited liquidity or temporarily paused creation. Investors also face risks involving smart contracts, the issuer, price feeds and redemption. These risks are different from those faced when simply holding registered shares.
Activity around tokenized assets is also growing. Robinhood Chain’s real-world-asset trading volume was reportedly around $390 million, including about $217 million from meme-coin and stock-token pairs.
Another major concern is the difference between genuine stock tokens and copycat tokens.
A token can use the name or ticker of a public company without having any connection to that company or any underlying shares.
Robinhood’s genuine Stock Tokens have a named issuer, legal terms and reference assets. Robinhood Chain documents describe them as tokenized debt instruments issued by Robinhood Assets (Jersey) Limited.
But because Robinhood Chain is permissionless, another developer can create a completely separate token using similar branding. That token could have a fixed supply but no custodian, redemption rights, authorized participant or claim on real shares.
Similar names can make it difficult for investors to tell the difference, especially inside wallets and decentralized exchanges. A token price that follows a public stock does not prove that the token is backed by shares or that investors have a legal right to redeem it.
IOSG said counterfeit stock-linked contracts may be an even bigger investor protection concern. Researchers identified tokens using copied equity names and token balances that appeared designed to imitate legitimate products.
There has been no publicly announced enforcement case based on those findings so far. Still, the situation shows why investors need to check the contract address, issuer information and redemption rules instead of relying only on a company ticker.
Tokenized equity adoption is also expanding. Tokenized stock holders reportedly reached 752,000 across five platforms, with Robinhood accounting for about 328,000.
As more people enter the market, clear information about ownership, backing and redemption becomes even more important.
What happens next may depend partly on whether AMC decides to take legal action. Aron said the company had hired securities counsel, but AMC has not announced a lawsuit or regulatory filing challenging Robinhood’s product.
Regulators will also have to decide how stock-linked tokens without direct approval from the underlying company should disclose ownership, collateral, issuer relationships and redemption rights.
For now, the creation and redemption process remains the main link between token prices and the real stock market. The AMC episode shows that this connection can become very visible when token trading stays active while the underlying stock market is closed.
