Large cryptocurrency purchases by low-cap companies raise concerns among experts such as Matthew Sigel from VanEck, who discusses potential fraudulent schemes.
VanEck's Doubts About Legitimacy of Cryptocurrency Investments
Matthew Sigel, head of digital assets at VanEck, expressed skepticism about recent decisions by micro-cap companies to purchase hundreds of millions of dollars worth of cryptocurrencies. He suggested that such initiatives could be aimed at 'insider inflating' of prices.
Examples of Questionable Company Announcements
One notable example is Singapore-based Trident Digital Tech, which announced plans to raise $500 million for an institutional XRP treasury. However, at the time of the announcement, its stock was trading below $0.40, with a market cap of only $16 million.
Expert Warnings About Market Manipulation
Sigel also referenced a case where a US company with a market cap of just $3 million announced it would purchase $800 million worth of BTC and the TRUMP memecoin. He cautioned that such initiatives, particularly without new investor disclosures, could be scams. Additionally, education technology firm Classover Holdings Inc. expressed a desire to set up a $500 million Solana treasury, despite having a market value of about $100 million.
Experts and VanEck officials urge investors to approach such announcements with caution, considering the potential for market manipulation.
