VanEck Exec Calls Out Small-Cap Firms Over Crypto Investment Claims

Matthew Sigel, a digital asset expert at VanEck, has recently voiced concerns about a rising trend among small-cap companies. These firms are announcing plans to invest hundreds of millions of dollars in cryptocurrencies like Bitcoin (BTC), Solana (SOL), and XRP. However, many have weak financial positions and extremely low market values. According to Sigel, these announcements are not genuine business strategies but appear to be efforts to boost stock prices through misleading information. VanEck Exec Spotlight Crypto Treasury Anomaly Several companies with market capitalizations under $100 million have made bold claims about buying large amounts of digital currencies. Some of these companies have promised to invest between $300 million and $800 million in crypto, even though their total value is much lower. These claims have sparked doubts among analysts and investors. Sigel highlighted Trident Digital Tech as an example. Recently, the company, valued at just $16 million, announced plans to raise $500 million to acquire XRP . The gap between its value and stated goal has caused many to question whether the announcement is possible. Sigel Likened Crypto Treasuries Plans To a Pump and Dump Scheme The VanEck Executive points out several warning signs. Most companies making these bold claims have no known track record in the crypto industry. They usually lack the funding needed to carry out such large investments. In many cases, these announcements come when the crypto market is rising. Segel suggests they are timed to take advantage of investor excitement. He warned that these patterns match the behavior seen in pump-and-dump schemes. President Trump was accused of this tactic in January. In this scheme, insiders push up stock prices with exaggerated news and then sell their shares for a profit. This leaves regular investors with overvalued stock and heavy losses. A Broader Industry Trend The problem is not limited to one or two companies. Addentax Group, a Chinese clothing company worth only a few million dollars, said it plans to buy $800 million worth of Bitcoin and TRUMP tokens. Likewise, DeFi Development Corp announced it would sell $5 billion in shares to purchase Solana . After the announcement, its market cap jumped from $7 million to $379 million, demonstrating how such statements can instantly influence investor behavior. Other companies, including Classover Holdings and Webus International, have made similar promises. Each claimed it would raise hundreds of millions to buy digital assets despite their total value of less than $100 million. Industry analysts are warning investors not to take such announcements at face value. Investors are advised to examine the company’s financial reports and ability to raise funds before making any investment decisions. The post VanEck Exec Calls Out Small-Cap Firms Over Crypto Investment Claims appeared first on TheCoinrise.com .

Source: The Coin Rise