‘Using the shell of US stocks, trading the money from the crypto circle, and profiting from the price difference of retail investors’— this set of operations played to the extreme by Wall Street is turning the crypto market into a playground for capital harvesting. From buying a Nasdaq shell for 5 million to mobilizing 10 billion in funds for a pump-and-dump scheme, the entire process is interconnected and guaranteed to profit, while the ones left holding the bag are always the retail investors chasing high prices in the crypto circle. Today, let's take '10 million dollars in startup capital' as an example to dissect this 'perverse play' that even institutions envy.
1. 10 million startup: Five steps to build the 'Coin-Stock Harvesting Machine'
The core logic of coin stock companies is to turn 'US stock listing qualifications' into 'money printing machines in the cryptocurrency market.' 10 million dollars may not seem much, but through five operational steps, it can leverage several times or even dozens of times the capital, forming a two-way harvesting closed loop between 'US stocks - cryptocurrency circle':
First step: buy 'shell' for 5 million, get Wall Street's entry ticket.
Half of the startup capital should be spent first on 'buying shells.' NASDAQ has a large number of 'zombie listed companies' — having only the listing code without actual business, annual revenue may only be a few tens of thousands of dollars, and even annual losses, but because they meet the minimum listing standards, they can still maintain listing qualifications. The acquisition price for such shell companies is usually between 3 million - 8 million dollars, and 5 million can just secure a 'clean shell' (no debts, no legal disputes).
Don't underestimate this shell; it is the core of the entire play: with a NASDAQ code, you can raise funds from global retail investors and enjoy the halo of 'US stock compliance endorsement' — for retail investors in the cryptocurrency circle, 'publicly listed companies buying coins' feels more trustworthy than 'nameless projects issuing coins,' which lays the groundwork for future stock pulling. Wall Street investment banks privately refer to this step as 'spending money to buy trust, the lowest cost compliance packaging.'
Second step: find FA to pull up the price with 5 million, package the story to raise 100 million.
The remaining 5 million must all be handed over to FA (financial advisor) for 'market value management.' FA's operations are very skilled: first, rename the shell company, such as 'Global Digital Asset Holdings' or 'Cryptocurrency Strategic Investment Group,' then package a set of 'cryptocurrency + AI + ETF' composite concepts, and weave a story of 'laying out global cryptocurrency assets through the publicly listed company platform.'
Next, FA will contact small public funds and family offices to raise funds under the name of 'Pre-IPO round,' promising that 'the stock price will double within 6 months after going public.' With the backing of a NASDAQ shell, coupled with the temptation of 'appreciation of cryptocurrency assets,' it is easy to raise 100 million dollars — at this point, the company's market value is directly inflated to 100 million dollars, while the actual startup capital invested is only 10 million, with a leverage ratio of 10 times.
More importantly, FA will sign a 'lock-up agreement' with early investors (for instance, locking up for 3 months) to ensure that there will not be large-scale selling in the early listing stage, leaving a time window for subsequent retail investors to take over.
Third step: buy coins worth 100 million + short hedging, locking in 'guaranteed profits.'
After obtaining 100 million in fundraising, the next step is to 'bind the cryptocurrency market.' The company will high-profile announce the 'establishment of a cryptocurrency asset investment department,' emulating MicroStrategy's 'Bitcoin standard' strategy, converting all 100 million dollars into mainstream coins like Bitcoin and Ethereum, and may even allocate some popular altcoins.
However, unlike MicroStrategy, these companies secretly open short positions in the futures market to hedge risks: for example, buying 60 million in spot and opening 40 million in short positions, or dynamically adjusting the long-short ratio based on coin price fluctuations. In this way, whether the coin price rises or falls, the company's account assets can remain stable at around 100 million dollars — profits are made when prices rise, and profits are made from short positions when prices fall, perfectly achieving 'risk hedging and profit locking.'
The cleverness of this operation lies in the fact that the company only promotes '100 million dollars buying coins' and does not mention 'short hedge,' creating an aggressive image of 'fully invested in cryptocurrency assets' in the market, further amplifying the expectation that 'coin prices rise → stock prices rise.'
Fourth step: stir up concepts to attract retail investors to take over, doubling the stock price premium.
When the news of 'publicly listed companies buying coins' spreads, retail investors in the cryptocurrency circle and small investors in US stocks will start to buy stocks frantically. Their logic is simple: 'coin prices rise, company assets appreciate, stock prices must rise' 'US stock compliance platform is safer than directly buying coins.'
FA will take the opportunity to pull up the stock price in the secondary market: slightly raising the stock price through market makers to create a 'continuous bullish trend,' then collaborating with KOLs in the cryptocurrency circle and financial media to create momentum, portraying the atmosphere of 'crypto concept stock leader' and 'the next MicroStrategy.' Soon, the stock price will rise from the issuing price by 100%-200%, and the market value will soar from 100 million to 200 - 300 million — at this point, the lock-up period for early investors just ends, and the cashing out window officially opens.
Fifth step: cashing out and leaving the mess for retail investors.
When the stock price is high, the company's founders and early investors will start intensive cashing out: transferring stocks through block trades or gradually reducing holdings in the secondary market. Since retail investors are still chasing high prices, the selling pressure will be absorbed by incoming funds, and the stock price will not plummet in the short term.
Once the cash-out is complete (usually able to cash out 100 million - 150 million dollars), the company will gradually expose problems: for example, announcing 'cryptocurrency asset investment losses' (which are actually normal fluctuations after hedging but are exaggerated), or delaying the disclosure of financial reports, or even secretly reducing hedge positions, allowing stock prices to naturally fall back as coin prices decline.
Eventually, retail investors will find that the 'cryptocurrency concept stocks' they bought are essentially 'shell companies + hedge accounts.' Once the coin price enters a bear market, the company's market value will quickly shrink, even returning to the original value of the shell company — and the founders have long left the scene with cash-out funds, leaving a bunch of retail investors stuck at high prices.
Second, hundreds of billions of funds follow suit: Wall Street copies the play, creating a 'spiral pulling' cycle.
The terrifying thing about this play is that it will form a 'self-reinforcing capital cycle.' When the first coin stock company makes a fortune through this model, Wall Street institutions will follow suit, ultimately leading to hundreds of billions of funds circulating between 'US stocks - cryptocurrency circle,' pushing up the bubble:
1. Institutions follow suit, capital flows into the cryptocurrency circle.
Seeing the 'guaranteed profit' model, hedge funds and quantitative institutions start to bulk purchase shell companies, repeating the process of 'buying shells - fundraising - buying coins - hedging.' From the second half of 2024 to now, NASDAQ has added 27 'cryptocurrency concept stocks,' most of which are this play. These companies have raised a total of over 8 billion dollars, of which more than 60% has been invested in the cryptocurrency market to buy coins, directly pushing up the prices of mainstream coins like Bitcoin and Ethereum — in 2025, Bitcoin rose from 80,000 dollars to 110,000 dollars, with this capital's contribution exceeding 20%.
2. Coin prices rise → stock prices rise, forming a 'left foot stepping on the right foot' cycle.
After the coin price is pushed up by institutional buying, it will stimulate the rise of US stock cryptocurrency concept stocks: for example, if Bitcoin rises by 10%, the stock prices of related companies may rise by 15%-20%, because retail investors believe 'the company's assets appreciate more.' After the stock price rises, the company can also raise more funds by 'issuing more stocks' to further invest in the cryptocurrency market, pushing up coin prices further — this 'coin price rises → stock price rises → fundraising to buy coins → coin price rises again' cycle is referred to in the industry as 'left foot stepping on right foot, spiraling up.'
But in reality, the core of this cycle is 'new retail investor funds': as long as there are continuous retail investors taking over the stocks, the cycle can continue; once retail investors' willingness to enter the market declines, the cycle will break, and the bubble will burst.
3. Harvesting multiple profits, retail investors being 'peeled layer by layer.'
Through this play, Wall Street can earn four profits: the first profit is 'shell company premium,' buying a shell for 5 million, after packaging it raises 100 million, earning the 'price difference of shell value'; the second profit is 'hedging profit,' buying coins while shorting, gaining 'risk-free arbitrage'; the third profit is 'stock price cashing out,' reducing holdings at high positions, earning 'the price difference of retail investors taking over'; the fourth profit is 'liquidity profit,' with large amounts of capital entering and exiting causing fluctuations in coin prices and stock prices, market makers can earn the fee difference.
And what about retail investors? In the cryptocurrency circle, chasing high prices for coins may lead to being stuck; in US stocks, chasing high prices for cryptocurrency concept stocks will ultimately find that the company is 'shell + hedge account,' and after the stock price plummets, they will lose everything — effectively being 'harvested in both directions' by Wall Street.
Three, retail investor pitfall guide: identify the three scam signals of coin stock companies.
For ordinary investors, the key to avoiding such traps is to clearly see the difference between 'coin stock companies' and 'real cryptocurrency asset companies.' One must be cautious in the following three situations:
1. The company has no core business and relies solely on 'buying coins' to maintain appearances.
Real cryptocurrency asset companies (like MicroStrategy, Coinbase) have their main businesses: the former profits from enterprise software, the latter makes money from exchange fees, buying coins is just 'asset allocation'; whereas fraudulent companies usually have no actual business, revenue is almost zero, and the only 'asset' is the purchased cryptocurrency, and even the hedging operations are unprofessional.
The method of judgment is simple: check the company's financial report to see if there are any revenues other than 'appreciation of cryptocurrency assets' in the 'revenue composition.' If the report is all 'investment income' with no actual operating income, it is highly likely to be a scam.
2. Fancy names, piled concepts, lack of substance.
Fraudulent companies love to package their names with words like 'global,' 'digital,' 'cryptocurrency,' and 'strategy,' conceptually covering 'cryptocurrency + AI + metaverse + Web3,' sounding omnipotent, but in reality, there are no specific landing projects. For example, some companies claim to 'build a global cryptocurrency payment network,' but their financial reports lack basic data such as 'number of partner merchants' and 'payment transaction volume' — these 'all-concept, no landing' companies are essentially tools for pulling and cashing out.
3. Stock prices skyrocket in the short term, shareholders reduce holdings intensively.
The stock price trend of fraudulent companies is usually 'short-term skyrocketing + long-term plummeting': in the early listing period, it relies on FA to pull up and concept hype, with stock prices doubling or even tripling within 1-3 months, but then there will be announcements of intensive reductions in holdings by shareholders (for instance, when founders and early funds reduce their holdings by more than 5%). Once the reduction starts, the stock price will quickly fall back because at this point, 'the pulling funds have left the scene, and retail investors have completed their takeover.'
