Cronos has doubled over the last week. Can the cryptocurrency keep raging higher?
Cronos (CRO -2.85%) has been one of the hottest gainers in the crypto market over the last week of trading. The company’s share price had risen 100% over the last seven days of trading as of 6:15 p.m. ET Saturday.
Cronos has seen massive gains this week thanks to news that the cryptocurrency will be a key holding for a new crypto-treasury company connected to President Trump that looks poised to launch in the near future. As of this writing, Cronos has a market capitalization of roughly $10.5 billion and ranks as the 17th-largest cryptocurrency by valuation.
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Cronos has seen massive gains following Trump-connected deal
Trump Media announced on Tuesday that it had entered into a partnership that would facilitate the merging of Crypto.com with special purpose acquisition company (SPAC) Yorkville Acquisition to create Trump Media Group CRO Strategy — a new publicly traded company. Cronos is a cryptocurrency launched by Crypto.com, and Trump Media Group CRO Strategy will be purchasing $1 billion worth of the token for its treasury.
Upon completion of the SPAC merger, foundations are place for Trump Media Group CRO to have $200 million in cash and $220 million cash-in mandatory exercise warrants,, and secure a $5 billion credit line. With the new company having access to a large capital base, it’s possible that the large prospective cash pile could be used to purchase more Cronos tokens.
What’s next for Cronos?
The new partnership with Trump-connected companies has been a big bullish catalyst for Cronos and could help push its valuation higher. On the other hand, this doesn’t necessarily guarantee that Cronos will be a strong performer.
For one prominent counterexample, consider the Official Trump cryptocurrency. While the token’s market capitalization surged as high as $5.5 billion shortly after it was launched and endorsed by President Trump on social media, its valuation has now fallen to roughly $1.7 billion. The fact that a crypto-treasury company built around Cronos holdings is seemingly on the horizon may suggest a significantly higher level of institutional support, but it still looks like a high-risk investment.
Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.