Nasdaq has announced new rules requiring shareholder approval before issuing new shares for cryptocurrency purchases. This led to a sharp decline in company stocks and cryptocurrencies.
Nasdaq's New Rule
Nasdaq has implemented a new rule requiring some crypto-focused companies to obtain shareholder approval before issuing new shares for crypto acquisitions. This move aims to preserve market integrity, as numerous companies look to raise significant amounts through complex funding deals. Approximately 184 U.S. companies are expected to raise around $132 billion for cryptocurrency purchases this year.
Decline in Crypto Stocks
Following the announcement, MicroStrategy shares fell over 3%. BitMine Immersion, SharpLink Gaming, and ETHZilla also experienced sharp declines. Cryptocurrencies like Bitcoin and Ether retreated by about 2-3%, resulting in a total crypto market capitalization decline of 2.2% by the end of the day.
Regulatory Intent
Nasdaq emphasized that the changes were made to ensure investors understand companies' strategies. The shareholder voting requirement adds a level of accountability to cryptocurrency deals. The total number of companies planning to raise funds for digital asset purchases indicates a growing interest in crypto fundraising.
Nasdaq's rule change highlights the seriousness of regulation in the cryptocurrency sector and its impact on companies operating in this space. The new requirements may significantly alter the approach to capital raising in the crypto market.
