Illiquid Shitcoins

Precious metal (PM) dealers typically do not pay the spot price when purchasing bullion from customers; instead, they pay below spot to account for their operational costs, risk, and profit margin.

This practice is standard across the industry, as dealers must cover expenses such as refining, minting, distribution, and the risk of holding inventory.

The amount paid under spot can vary significantly depending on market conditions, dealer inventory levels, and the type of metal or product being sold.

For instance, during periods of high price volatility or when refiners are at capacity, dealers may pay substantially below spot to mitigate risk, especially if they cannot quickly resell the metal to refiners or wholesalers.