The value of Nilam Resources shares increased by 1,700% after announcing the intention to purchase BTC. In the background there are accusations of pump and dump

The cryptocurrency market is sometimes described as a place full of wild speculations. It turns out, however, that even stranger phenomena occur in the case of shares of gold mining companies. The value of Nilam Resources securities increased by 1,700%. Reason? The company announced that it would buy 24,800 bitcoins. The problem is that raw data shows that the company's situation is not the best.

Nilam Resources wants to buy BTC

I wrote about this case yesterday. As a reminder, though: Nilam Resources is a small-cap gold mining company that announced it plans to buy as much as $1.7 billion in bitcoin. For this purpose, it is to issue shares and sell them in exchange for BTC. In addition, it is to acquire 100% of the common shares of MindWave, a special purpose vehicle that will operate in Mauritius and deal with the custody of the mentioned digital assets.

There wouldn't be anything special about it. Well, the company decides to make an investment. However, the day after the decision was announced, the price of a single share soared. And in a very literal way, registering a new ATH of 33 cents per share. That's a 1,700% increase from the 1.8 cents that one such security paid last week. According to OTCMarkets, the company's current market capitalization is $280 million.

The latter is important information. The Nilam management board wants to buy BTC for USD 1.7 billion, but the company itself is worth several times less! This list of amounts does not scare investors.

Many people believe that everything is just a “marketing trick” and the company will not be able to implement its idea.

This is the opinion of Quinten Francois, cryptocurrency YouTuber and co-founder of the Web3 market company WhereAt Social. He believes that the company is only trying to save its situation in a desperate way.

Dylan LeClair, director of market intelligence at digital asset fund UTXO Management, went a step further and forecast that everything will end in a flop.

Goal: Beat MicroStrategy?

To better illustrate what Nilam's management dreams of, it is worth adding that the company wants to own more bitcoins than any other company listed on the stock exchange in the United States, perhaps with the exception of MicroStrategy. Although, with such bold announcements, no one will be surprised by the rate being raised soon.

According to BitcoinTreasuries data, the “gold” company would have more bitcoins than Elon Musk's Tesla or mining companies – Riot Blockchain, Hut 8 Corp and Marathon Digital Holdings.

Interestingly, the former CEO of Nilam Resources himself, Ron McIntyre, reacted quite strongly to the recent reports. He stated that no one from the management board asked for his review and apparently had no detailed knowledge about such plans.

When asked why he resigned, McIntyre replied:

Just look at the chart – it's classic pump and dump.

He claims that the matter will probably be dealt with by the relevant authorities.