Igniting Wall Street: The opportunities and challenges of "crypto-stock linkage"

Fourth, Risks and Challenges of "Coin-Stock Linkage"

Market Value Trap. Many investors don't understand how stock market value is calculated. Companies with a coin-stock linkage often frequently issue additional shares, resulting in a significant undervaluation of their market capitalization. Many people rush in when they see a market capitalization of $50 million or $10 million, unaware that the actual market capitalization after the additional issuance is already $1 billion.

Lack of Performance Support. The vast majority of coin-stock companies lack stable core revenue, and their stock prices are highly dependent on sentiment and hype.

High Leverage and Volatility. The coin-stock concept is like leveraged crypto, with both price fluctuations magnified. Once sentiment recedes, a "double kill" is easily achieved—a drop in both coin and stock prices.

Death Spiral Risk. Ethereum founder Vitalik Buterin once described the worst-case chain reaction: ETH decline → forced liquidation → further market crash → collapse of trust. V. Future Trends of "Coin-Stock Linkage" More publicly listed companies holding cryptocurrencies are emerging. Currently, these are concentrated in BTC, ETH, SOL, and BNB, and will continue to expand to XRP, DOGE, TRX, TON, SUI, LTC, FET, and others. The US stock market is the primary battlefield, with some activity in the Hong Kong stock market. The US stock market remains the core stage, and Hong Kong stocks have a certain appeal among Asian project developers. Regulation will eventually catch up. Innovation always runs ahead of regulation, and regulators will only intervene after systemic risks emerge. Invest with caution. Whether it's the inscriptions of 2023, the memes of 2024, or the cryptocurrency-stock boom of 2025, ultimately only a handful of leading companies will survive both bull and bear cycles, while most concept stocks will ultimately return to zero. The cryptocurrency-stock linkage, a product of the deep integration of the crypto and traditional capital markets, holds enormous opportunities but also carries significant risks. Investors must understand both cryptocurrencies and stocks, and, more importantly, the rules of the capital markets. Flying on the wind requires not only courage but also a parachute.