Vanek was skeptical when a microvalue company riding a bullish wind in the crypto market announced it would buy cryptocurrency worth hundreds of millions of dollars.
Matthew Sigel, head of digital assets at Vaneck, said many of these attempts could be scams aimed at “insider expansion” the market.
Financial plans have been coming up in recent weeks, especially for popular Altcoins such as XRP and Solana (SOL), but these announcements come mainly from companies with low market capitalization and no direct crypto-related affiliations.
One recent example is Singapore-based Trident Digital Tech, which announced plans to raise $500 million to build one of the world’s first large institution, XRP, Treasury. However, at the time of the announcement, its shares were trading at less than $0.40 per share on NASDAQ, with a market capitalization of just $16 million.
Vanek’s Siegel says such attempts are often aimed at artificially expanding stock prices by misleading investors. “If the market capitalization is very low and there’s no disclosure from new investors, I think it’s a scam,” he said.
Sigel cited an example of a post he created on the X (formerly Twitter) platform last month. There, US companies worth just $3 million and Chinese executives announced they would buy $800 million worth of BTC and Trump Memon. The company was Addentax Group Corp, a clothing manufacturer based in China. The company’s shares are currently trading at $0.63.
Similarly, earlier this month, Classover Holdings Inc., a publicly listed education technology company with NASDAQ, said it wanted to establish a $500 million Solana Treasury despite its market value of around $100 million. The company’s shares are traded for less than $4.
Vaneck officials and industry observers warn that such announcements should be approached with caution.
*This is not investment advice.
