Education tech firm Classover Holdings (KIDZ) said in early May that it would sell $400 million worth of shares to buy solana. Its stock exploded higher. Shares of the thinly traded company, then with a market cap well shy of $50 million soared from $1.15 to more than $7 in just two sessions before settling back to the current $3.69. .

Classover wasn’t the first company to experience the crypto surge, and it won’t be the last.

A growing number of obscure, microcap and nanocap companies are embracing cryptocurrency — not as a business line or payment method, but as a headline-grabbing balance sheet item. They often follow the same script: an announcement of a shift in strategy to hold digital assets like bitcoin or solana, followed by a pop in the stock price.

Today, GD Culture Group (GDC), a company with a market cap of around $30 million, announced plans to sell up to $300 million in shares to buy bitcoin and TrumpCoin (TRUMP), a meme token themed around U.S. President Donald Trump. The company declared that this purchase was part of its new “crypto asset treasury strategy.” The stock rose 13% on the news.

Also today, Amber International Holdings (AMBR), valued at just under $900 million, said it would allocate $100 million to a basket of cryptocurrencies, including bitcoin, ethereum ETH$2,435.83, solana, XRP$2.44, Binance Coin BNB$646.90 and sui SUI$3.87.

All are attempting to mimic the original corporate crypto evangelist: Strategy (MSTR). In August 2020, the enterprise-software company pivoted to using bitcoin as its primary treasury reserve asset. Since then, its stock has soared more than 3,000%, fueled not by software sales or product innovation, but the price of bitcoin. Many retail investors now treat the stock as a proxy for bitcoin exposure.

But while Strategy had a longstanding business and a consistent, transparent strategy — in addition to its chairman, Michael Saylor, emerging early as a bitcoin proponent — these newer companies appear to be leveraging the crypto hype machine with little track record or follow-through.

Take Worksport, a Nasdaq-listed manufacturer of truck bed covers. Last year, the company announced plans to invest its cash reserves into bitcoin and XRP. Its stock, which had been sliding for years, jumped after the announcement. But the rally didn’t last, and the stock has since returned to pre-announcement levels. The company said in April that it had made a six figure initial purchase.

“We are still bullish on our initial positions and have been holding. We will consider adding in the future as appropriate,” a spokesperson told CoinDesk at the time.

The playbook seems straightforward: Find a buzzy crypto token, announce a purchase or strategic allocation, then ride the temporary surge in retail investor attention. In many cases, the amount the company plans to invest vastly exceeds its own market capitalization. That was true for Classover and GD Culture, both of which proposed multi-hundred-million-dollar allocations despite being worth a fraction of that.

It’s unclear whether these companies will actually make their proposed purchases or how they plan to raise the funds. But the market’s reaction points to a pattern: Microcap firms are using crypto as a megaphone.

Still, the tactic is proving effective in the short term. As long as the market rewards crypto-related headlines with stock rallies, small companies are likely to continue jumping on the bandwagon.

Whether any of them become long-term crypto believers like Strategy remains to be seen.

There are, however, some firms that appear to be taking the Strategy route more seriously — and seeing results. Japanese investment firm Metaplanet has steadily grown its bitcoin holdings to 6,796 since launching its Bitcoin Treasury Operations in April 2024, positioning itself as one of the more committed corporate holders in Asia.

Similarly, U.S.-based medical device company Semler Scientific has been buying bitcoin consistently since adopting it as a reserve asset. It now holds 3,634 BTC on its balance sheet, reflecting a strategy that mirrors MicroStrategy’s playbook rather than simply borrowing its headlines.

Disclaimer: Parts of this article were generated with the assistance from AI tools and reviewed by our editorial team to ensure accuracy and adherence to our standards. For more information, see CoinDesk’s full AI Policy.

Only a handful of hours ago crypto markets were buoyed as the Securities and Exchange Commission signaled its intent its dismiss a lawsuit against Coinbase (COIN).

The welcome regulatory news sparked 5% gains for COIN and the likes of increasingly important crypto trading platform Robinhood (HOOD), and sent bitcoin (BTC) breaking out of its recent tight trading range to within sight of the $100,000 level.

The first bomb to break the good vibes came late in the U.S. morning when Bybit was stung by about a $1.5 billion hack — the largest such exploit ever in crypto. That news sent bitcoin and ether (ETH) sliding roughly 2% in a manner of minutes.

Prices quickly seemed to stabilize and — at least in the case for bitcoin — bounce a bit.

Et tu stocks?

Any sort of bounce, however, was quickly snuffed out as modest losses for U.S. stocks began to accelerate in afternoon trading.

Among the excuses for the quick retreat was a poor reading from the Michigan Consumer Sentiment Index, which unexpectedly slipped to 64.7 versus forecasts for 67.8. The same survey’s inflation expectations rose to 3.5% against an expected 3.3%.

An outlier, but perhaps also a reason for selling, was a new coronavirus scare out of China. Discovered by researchers at the Wuhan Institute, HKU5-CoV-2 is “strikingly similar” to the virus that caused the 2020 pandemic, according to the Daily Mail.

Shortly before the close of trading on Friday, the Nasdaq is lower by 2.2% and the S&P 500 by 1.7%. The 10-year U.S. Treasury yield has fallen nine basis points to 4.42%.

As for crypto, bitcoin has more than erased its gains of the past couple of days, trading back to $95,000 and lower by nearly 4% over the past 24 hours. Ether (ETH) has pulled back to $2,650, also lower by about 4%. The broader CoinDesk 20 Index is down 4.4%.

Blockchain analytics firm Arkham Intelligence said North Korea’s Lazarus Group was behind Bybit’s $1.46 billion hack.

In an earlier post on social media platform X, Arkham offered a bounty of 50,000 ARKM tokens for anyone who could identify the attackers for Friday’s hack. Later, the platform said onchain sleuth ZachXBT submitted “definitive proof” that the attackers were the North Korean hacker group.

“His submission included a detailed analysis of test transactions and connected wallets used ahead of the exploit, as well as multiple forensics graphs and timing analyses,” the post said.

Read more: Bybit Loses $1.5B in Hack but Can Cover Loss, CEO Confirms

The hack that rocked the crypto market and saw most prices tumbling was called the “largest crypto theft of all time, by some margin,” by Elliptic’s Tom Robinson, co-founder and chief scientist. “The next largest crypto theft would be the $611 million stolen from Poly Network in 2021. In fact it may even be the largest single theft of all time.”

Blockchain data provider Nansen told CoinDesk that the attackers first withdrew nearly $1.5 billion worth of funds from the exchange into a main wallet and then spread the funds across several others.

“Initially, the stolen funds were transferred to a primary wallet, which then distributed them across more than 40 wallets,” Nansen said. “The attackers converted all stETH, cmETH, and mETH to ETH before systematically transferring ETH in $27 million increments to over 10 additional wallets,” Nansen said.

The attack appeared to have been caused by something called “Blind Signing,” where a smart contract transaction is approved without the comprehensive knowledge of its contents.

“This attack vector is quickly becoming the favorite form of cyber attack used by advanced threat actors, including North Korea,” said blockchain security firm Blockaid’s CEO Ido Ben Natan. “It’s the same type of attack that was used in the Radiant Capital breach and the WazirX incident.”

“The problem is that even with the best key management solutions, today most of the signing process is delegated to software interfaces that interact with dApps. This creates a critical vulnerability — it opens the door for malicious manipulation of the signing process, which is exactly what happened in this attack,” he said.

Bybit CEO Ben Zhou wrote earlier on X that a hacker “took control of the specific ETH cold wallet and transferred all the ETH in the cold wallet to this unidentified address.” He also confirmed that the exchange “is solvent even if this hack loss is not recovered.”

Oliver Knight contributed to the reporting of this story
Read more: Bitcoin, Ether Slump as Crypto Prices Dip on Report of Massive $1.5B Bybit Hack

Crypto isn’t all that different from politics. According to Rushi Manche, the founder of blockchain company Movement, “Crypto is an attention game.”

It’s fitting, then, that Donald Trump — the master of all things attention — is so at home selling memecoins. But it’s not just Trump’s inner circle that’s managed to capitalize on his crypto ventures, which include the $TRUMP coin and World Liberty Financial.

Once a vocal crypto skeptic, the president has become the industry’s largest “key opinion leader” — or KOL, in blockchain industry parlance: a trader whose portfolio is closely watched by other investors deciding what to buy and sell.

Trump’s foray into crypto has created a new go-to-market playbook for ambitious token peddlers like Manche — blockchain founders who realize pumping the price of a token can be as simple as elbowing into a sitting president’s crypto portfolio.

The president’s primary vehicle for blockchain trades is World Liberty Financial (WLFI), a decentralized finance (DeFi) venture he announced with his sons over the summer. After accruing more than $400 million by selling a token, the company, which does not yet have a product, has built up a portfolio containing millions of dollars in the assets of other crypto projects. On Wednesday, it announced it was launching an official “strategic reserve” of crypto investments.

The trades have already raised serious concerns about conflicts of interest, insider dealing, and the very nature of how influence is leveraged in the digital asset space. Trump’s political opponents are calling for investigations into his growing blockchain empire.

But crypto founders like Manche see World Liberty’s crypto investments as something different: a once-in-a-generation marketing opportunity. “You need to have a product roadmap that makes sense,” said Manche. “But you also need to have a strategy for your token.” And what better way to boost the price of your cryptocurrency than by publicly tying it to the leader of the free world?

Moving MOVE

Twenty-two-year-old Rushi Manche is set to launch Movement L2, an Ethereum-based blockchain. Despite his youth, he’s earned a reputation within the industry as a sharp operator, having secured over $38 million in venture funding immediately after college.

Ahead of Donald Trump’s second term, Manche worked to forge ties with his circle. On the eve of the inauguration, he attended the Crypto Ball, an event connecting crypto industry leaders with political insiders. There, he engaged with key figures like Zak Folkman and Chase Herro, leaders of Trump’s World Liberty Financial.

On Jan. 28, when news broke that World Liberty Financial had acquired approximately $2 million in the Movement’s MOVE tokens, Manche pounced.

Immediately, he took to social media: “We are proud to be the first altcoin, first modern blockchain platform, and first alternative [virtual machine] under the new administration,” he wrote in an X post. “MOVE is Made in America.”

Then, in media interviews throughout the day, he described the WLFI purchases as a positive sign for Movement’s trajectory: “It’s a good sign that the president of the United States’s DeFi program is purchasing MOVE,” he told CoinDesk. “It shows a good sign of faith, and good solidarity with Movement ecosystem.”

Rumors suddenly started swirling on X that Elon Musk was eyeing Movement as a potential infrastructure partner for his Department of Government Efficiency (DOGE).

Manche distanced himself from the rumor, claiming he had only heard about it when the rest of the public did. But he didn’t discourage the speculation, either. “We can’t really talk much about it,” he told CoinDesk. “Our papers have never hit the DOGE desk,” but “we work with a variety of government agencies and institutions.”

The MOVE price briefly surged by 20% within hours of the news.

The World Liberty Financial play

Manche is far from the only crypto founder to recognize the value of associating with the Trump blockchain brand.

Donald Trump announced World Liberty Financial in mid-October, during the final days of his presidential campaign. The company says it is building a crypto lending platform that advances American values, but it has yet to launch a product. Within days of its formal announcement, however, it began selling a token, WLFI.

Read more: Inside the Trump Crypto Project Linked to a $2M DeFi Hack and Former Pick-Up Artist

According to a disclaimer on the World Liberty website, Donald Trump holds a majority stake in the venture through his company, DT Marks LLC, and is entitled to around 75% of WLFI token sale proceeds. The token provides holders with a vote on the eventual platform’s direction. Currently, it is impossible to trade and has restricted sales to non-Americans and accredited U.S. investors only.

Due to these restrictions, WLFI struggled to meet its fundraising targets initially. What’s the point of buying a cryptocurrency that you can’t sell for a profit? Many in the industry—including some of the president’s own supporters—criticized the sale as a cash grab.

But Justin Sun, a Chinese-born crypto founder, was among the first to reveal how WLFI might still appeal to a very specific type of investor. On Nov. 27, he bought $30 million in the incoming president’s WLFI tokens, making him the project’s largest single investor. Sun then lobbed praise onto Trump and WLFI in a series of social media posts.

Today, Sun is perhaps best known for purchasing a banana taped to a wall for $6.2 million, but the U.S. Securities and Exchange Commission — a department now under the control of Donald Trump’s White House — previously charged him with fraud and market manipulation. The case is ongoing.

The president’s crypto company, meanwhile, has purchased millions of dollars in TRX — the native token of Sun’s TRON blockchain — and WBTC, a Bitcoin derivative with suspected ties to Sun. World Liberty also named Sun an official adviser.

Blockworks reported on Feb. 3 that World Liberty Financial was shopping around a deal: if a project buys at least $10 million worth of WLFI tokens (with a 10% fee), WLFI will buy an equivalent amount of the project’s native token​. Movement Labs and Tron denied making such agreements.

World Liberty’s investments are expected to accelerate with the establishment of a strategic reserve, but a lawyer for World Liberty Financial, Alex Golubitsky, said he could not comment on whether WLFI’s investments count as an official Trump endorsement.

The Trump family, however, seems aware of its power to move markets. On Feb. 3, shortly after World Liberty Financial reallocated a large share of its tokens into ether (ETH), the native token of Ethereum, Eric Trump tweeted, “In my opinion, its a great time to add $ETH. You can thank me later.”

He quickly edited the tweet, removing the “You can thank me later” line.

The art of the pump

Over the past several months, Rushi Manche made a concerted effort to ingratiate himself in Trump-world. He attended the crypto ball, an industry event on the eve of the inauguration that mixed figures from the administration with crypto industry leaders. He has also made frequent trips to Washington, D.C. where he has lobbied on behalf of the crypto industry with people like Zak Folkman and Chase Herro — the leaders of World Liberty Financial.

On Feb. 10, when WLFI made a second round of MOVE purchases, Manche immediately ran back the same playbook he had used a week earlier.

Within minutes, reporters received a press release from Movement’s PR team: MOVE was now “one of the most significant holdings in Trump’s portfolio,” the release read, and Manche was “available to discuss what Trump’s investment means for the project, its role in advancing blockchain, and the broader implications for the crypto industry.”

Manche again took to social media, reposting a photo of himself and Donald Trump Jr. alongside a screenshot of World Liberty’s MOVE purchases. The photo was taken at an event for Ondo, another project in World Liberty’s crypto portfolio.

“[P]olitics is the most important [go-to-market] play for crypto companies today,” Manche said in a lengthy X post a few minutes later. “[M]y sense is that the next five years will be a space race for crypto hegemony – the teams that can lock in the relationships with federal agencies, institutional capital, and world leaders are the ones that survive.”

The post drew heated debate. Some viewed Manche’s government-centric posturing as a shrewd business move. Others condemned it as a betrayal of crypto’s anti-establishment ethos — a shortsighted attempt to exploit Trump’s fame to pump a token ahead of a major product launch.

Manche is unfazed by the backlash. He likens Movement Labs’ approach to that of Cardano and Ripple — projects that, despite heavy scrutiny, have maintained strong market positions due to their deep understanding of how to earn and keep attention.

“Sure, you have anons on Twitter calling them scams,” he said. “But look who’s winning.”

He pointed to Ripple’s “XRP Army,” whose fervor has kept the project relevant despite technical critics and regulatory scrutiny. Ripple’s XRP token has topped price charts for nearly a decade, Manche said, by building “the biggest cult in the world.”

Similarly, he praised Charles Hoskinson, the outspoken founder of Cardano, for having “mastered the art of attention” and getting Cardano’s ADA token into the hands of so many investors. Hoskinson has “contributed more to the space” than the very same Ethereum developers who dismiss Cardano as “a broken blockchain,” Manche said.

“If you ask a taxi driver what they’re buying, they’ll tell you XRP, ADA — not even ETH,” said Manche. “That’s what the real people are talking about outside of our little bubble.”

As for Movement, Manche’s strategy is clear: align with Trump and grab attention, for better or worse. In his words: “Love me, hate me, just don’t forget me.”