Who Keeps a Bubble Alive? Skin in the Game and the Survival of Rational Bubbles

Abstract

We study how retained ownership supports the value of an asset that pays no dividends and is held only for resale. A sponsor chooses hidden maintenance that determines market survival, bears its full cost, and captures only the benefit accruing to its retained tokens. A positive stationary equilibrium exists if and only if retention meets an endogenous minimum. Under additional curvature restrictions, retention above this threshold supports two positive stationary equilibria. Conditional on survival, prices below the upper equilibrium converge to the lower one while the upper price is the largest feasible initial valuation. Greater retention expands the feasible price interval. Credible news that future retention will be below the minimum causes an immediate collapse through backward unraveling. The model identifies a governance channel through which insider unlocks can affect valuation without changing total token supply or fundamental cash flows.