This article first appeared on GuruFocus.
Applied DNA Sciences (NASDAQ:BNBX) became the latest flashpoint in the cryptoequity crossover trade after its shares suddenly surged more than 50% on Sept. 26. The move puzzled investors until days later, when the company revealed a $58 million equity deal to acquire BNB, a cryptocurrency closely linked to Binance Holdings Ltd. The deal also brought in Anthony Scaramucci, founder of SkyBridge Capital and a former Trump White House official, as a strategic adviser. The stock then rallied another 72% before giving back nearly all its gains. According to Applied DNA’s chief investment officer Patrick Horsman, the spike occurred even before the company began formal investor briefingsa sign that information may have leaked during the final stages of deal preparation despite what Horsman described as a rigorous confidentiality process.
The Applied DNA episode has become a case study in a broader pattern catching regulators’ attention. Data from Architect Partners show that 20 of 35 digital-asset treasury companies (DATs) recorded significant price gains before their crypto-related announcements, with median advances of around 10%. SharpLink and SUI Group were the most striking examples, rising 79% and 219% respectively in the days before their deals became public. The U.S. Securities and Exchange Commissionseen as more receptive to crypto initiatives under President Donald Trumpis now reviewing hundreds of DAT transactions amid signs that speculative trading and insider activity may have distorted price behavior. Executives involved in the sector say the volatility has driven away traditional investors, while early backers in private equity placements are often locked up and unable to trade during the most dramatic swings.
The DAT model, once celebrated for providing institutional exposure to digital assets, now faces a test of credibility. Collectively, these vehicles have amassed around $140 billion in Bitcoin, but buying momentum has cooled since the summer amid regulatory scrutiny and a broader selloff triggered by U.S.China trade tension. Industry figures such as Cardano co-founder Charles Hoskinson and Scaramucci argue that DATs must evolve from speculative instruments into long-term blockchain development businesses. Scaramucci, who also received warrants in the Applied DNA transaction, called the firm’s new direction an accretive long-term story, adding that the only thing that can solve this is time and good fundamentals. For now, the market seems divided between those chasing short-term volatilityand those betting that discipline, not hype, will define the next phase of crypto finance.