Recently, a shocking claim was made that the goals of companies purchasing Ripple (XRP) and Solana (SOL) are to manipulate prices through pump-dump schemes.
Matthew Sigel, the head of digital assets at VanEck, claimed that announcements of cryptocurrency purchases by some low market cap companies listed on the Nasdaq could be aimed solely at inflating prices and selling (pump-dump).
As the cryptocurrency market rises, it has become fashionable for small companies to announce cryptocurrency purchases worth hundreds of millions of dollars. However, Matthew Sigel expresses doubts about the reality of these announcements. Particularly, announcements regarding purchases of popular altcoins like XRP and SOL raise questions in investors' minds.
Lastly, Singapore-based Trident Digital Tech announced plans to raise funds to create a $500 million XRP treasury. However, the company's market cap is only at $16 million and its shares are trading below 40 cents.
Matthew Sigel warned that a large portion of such announcements are suspicious transactions. Sigel generally evaluates the announcements of such ambitious purchases by these low market cap companies, made without any new major investor announcement, as pump-dump operations.
At the beginning of this trend, Sigel pointed out that a small market cap textile company based in China listed on the Nasdaq announced a plan to purchase $800 million worth of Bitcoin and TRUMP coin, without sharing the company's symbol to warn investors. Similarly, the education technology firm Classover Holdings recently announced a plan to create a $500 million SOL treasury, but the company's market cap is below $100 million.
Experts advise investors to approach such announcements cautiously and recommend a careful examination of whether the companies' financial structures align with their statements.
