Smart Digital Shares Drop 87% After Controversial Crypto Fund Reveal – What Happened?
Smart Digital Group, a digital marketing services provider, recently announced plans to create a diversified cryptocurrency fund focused on established digital assets such as Bitcoin and Ethereum.
While the move was aimed at strengthening the company’s role in the digital asset space and tapping into the growing trend of cryptocurrency adoption, the market reaction was not what the company expected.
Smart Digital Group Cryptocurrency Fund
In a recent press release, Smart Digital Group revealed plans to build a diversified cryptocurrency fund to capture the opportunity. The company is committed to a structured approach to managing and protecting its cryptocurrency portfolio, emphasizing strict risk controls and compliance.
Smart Digital also stated that details on the size and allocation of the fund will be shared based on regulatory requirements and market conditions. On paper, this seems like a well-planned move into the world of digital assets.
Stocks plummeted 87%
However, Smart Digital Group’s move into the digital asset market did not go as expected. Contrary to what the market trend suggested, SDM stock did not follow the usual crypto boom pattern. Instead, investors were caught off guard by the move, and SDM stock plunged more than 86%, from $13.60 to $1.88 on September 25.
Animoca Brands’ 2025 report found that companies announcing plans to launch crypto funds typically saw a 150% increase within 24 hours. Brera Holdings’ shares soared 464% after rebranding as Solmate and launching a Solana-backed investment fund with support from ARK Invest and the Solana Foundation. Similarly, Juizi Holdings jumped 25% after approving a $1 billion Bitcoin investment fund.
What's going on?
Investors appreciate clarity and preparation. Successful companies often have clear financials, strong backing, and a detailed roadmap.
However, Smart Digital left important details, such as the size of the fund, its funding sources, and its partners, unclear. Without a clear crypto strategy, what could have been an opportunity has become a warning sign for investors.
Rising risks for corporate cryptocurrencies
This comes as regulators increase scrutiny of companies investing in cryptocurrencies.
According to a report from the Wall Street Journal , US regulators are investigating companies whose stock prices have soared before announcing cryptocurrency plans, looking for signs of insider trading or disclosure violations.
Notably, the SEC and FINRA have contacted some of the more than 200 companies with cryptocurrency investment strategies this year. A recent report also shows that corporate cryptocurrency investments are cooling sharply.
These moves highlight the risks for public companies entering the cryptocurrency market, which investors and regulators are watching closely, showing that preparation and transparency are really important.