VanEck Fund Director Believes Investors Should Not Be Too Optimistic About Companies Announcing Hundreds of Millions of Dollars in Cryptocurrency Fundraising
Crypto Capital Raising - A New "Pump" Trick for "Short-Lived" Companies? Image: Chainalysis
In recent weeks, institutional investment waves have flooded back into the cryptocurrency market. Besides "leaders" like Strategy, Metaplanet, Tether, and Bitcoin and Ethereum ETFs continuously accumulating BTC and ETH, many new names like GameStop, SharpLink Gaming, and Trump Media have announced fundraising of hundreds of millions, sometimes billions of USD to establish cryptocurrency strategies.
Not stopping there, many lesser-known companies have suddenly announced fundraising of hundreds of millions of USD to accumulate major cryptocurrencies like XRP, SOL, or HYPE, including DeFi Development Corp (1 billion USD), Reitar Logtech (1.5 billion USD), Classover (500 million USD), Addentax Group (800 million USD), Vanadi (1.1 billion USD), Webus (300 million USD), K Wave Media (500 million USD), Mercurity Fintech (800 million USD), Interactive Strength (500 million USD), Trident Digital (500 million USD), Tony G (half a million USD), and more.
Immediately after announcing these fundraising intentions, the stock prices of these companies often surge multiple times, attracting significant public attention.
However, according to VanEck's Digital Assets Director Matthew Sigel, many of these fundraising plans are essentially just a backdrop for inflating stock prices of small-cap companies after a long period of decline.
A typical example is Trident Digital, a Singapore-based company listed on the Nasdaq. At the time of announcing a plan to raise 500 million USD to buy XRP, the company's stock price was only 0.4 USD per share, with a total market capitalization of 16 million USD.
Mr. Sigel commented:
"Most of these plans are just pump-dump tricks by insiders. If the company's market capitalization is very small and there's no disclosure about investment allocation, I will see it as a scam."
The VanEck Director was also one of the earliest to point out the abnormality of this trend. In mid-May, when Addentax Group, a Chinese clothing and logistics company, announced plans to establish an 800 million USD fund to buy BTC and Trump, Sigel wrote:
"When a US-listed penny stock with Chinese management announces plans to buy 800 million USD of BTC and TRUMP coin, immediately ignore it."
When a $3M market cap US-listed penny stock with all Chinese management announces plans to buy $800M of BTC & TRUMP coin, you don't post the ticker. pic.twitter.com/TbwGT8bSU4
— matthew sigel, recovering CFA (@matthew_sigel) May 15, 2025
Compiled by Coin68
