Jessy, Jinse Finance
On June 16, the Financial Times reported that TRON has reached a reverse merger agreement with the NASDAQ-listed company SRM Entertainment.
SRM Entertainment announced on June 16 that it has signed an agreement with private investors to initiate a TRON token (TRX) treasury strategy with a $100 million equity investment. The new entity plans to inject token assets worth $210 million and rename itself as "Tron Inc.".
Insiders said that the newly established "Tron Inc." will adopt a strategy similar to MicroStrategy's issuance of convertible bonds to buy Bitcoin, purchasing and holding TRX tokens to transform itself into a leveraged digital asset investment tool. This move is seen by industry insiders as an upgraded version of MicroStrategy's "Bitcoin holdings" strategy.
However, unlike MicroStrategy's simple bet on Bitcoin's price increase, TRON's TRX purchase strategy is more of a promotion for the TRX token itself. The more direct capital operation is to purchase TRX through financing, thereby raising the TRX price.
This is not unprecedented, as Sharplink previously purchased ETH through financing. Similar to TRON's close interest association with TRX, Sharplink also has an extremely high interest association with ETH.
Both Sharplink and TRON's moves may signal a new beginning in the industry, where crypto companies not only actively seek to go public but also actively raise funds to purchase their project tokens. A new form of capital operation is thus unfolding.
The Essential Difference Between TRON's Model and MicroStrategy's Model
According to existing information disclosure, TRON will go public by backdooring SRM Entertainment, establish a new "Tron Inc.", and then imitate MicroStrategy by issuing convertible bonds to finance the purchase of TRX tokens.
The NASDAQ-listed company Sharplink, which recently announced the purchase of ETH, used $425 million in private placement financing (led by ConsenSys Software Inc., which has high interests with ETH) to purchase ETH. Moreover, Ethereum co-founder, ConsenSys founder and CEO Joseph Lubin will serve as SharpLink's board chairman.
Although the specific operational methods differ, they are essentially similar. Whether Tron Inc. or the financed Sharplink, the purchase of TRX and ETH is deeply tied to their own interests, unlike MicroStrategy and other companies imitating Bitcoin purchases, which are merely third-party asset allocations.
While Bitcoin's price fluctuations and MicroStrategy's investment profits rely on the consensus of "digital gold", TRON's operation is a blatant self-manipulation of TRX prices.
Specifically, it bypasses the strict review of traditional IPO by backdooring the $30 million market cap SRM to NASDAQ. Then, the TRON Foundation will inject TRX tokens worth $210 million into the new entity "Tron Inc.", instantly controlling 17% of TRX's circulation. This lays the foundation for the company to manipulate token prices. The new company is expected to continuously issue convertible bonds to buy TRX, entering a cycle of "issuing bonds-buying tokens-pumping prices-issuing bonds again", which could cause TRX prices to spiral upward.
Risks Overlooked in Heated Emotions
After the transaction announcement, SRM's stock price soared over 300% on Monday, and TRX also surged, but investors overlooked the risks.
Although TRON's operation imitates MicroStrategy, its approach is much riskier. First, TRX's market value and liquidity are far lower than Bitcoin's. If "Tron Inc." purchases TRX on a large scale through financing, it may temporarily boost the token price, but this increase lacks real demand support and is essentially an artificially created liquidity illusion.
MicroStrategy finances Bitcoin purchases through bond and stock issuance, essentially betting on asset appreciation with low-interest debt. This strategy relies on Bitcoin's long-term appreciation trend. However, if TRX price drops, "Tron Inc." might face risks of insufficient collateral, debt default, or forced liquidation.
Regulatory risks also persist. Although the SEC's investigation into Justin Sun is currently suspended, this doesn't mean regulatory exit, especially given the SEC's cautious attitude towards cryptocurrency-related securitization. While TRX's token attributes are not yet clearly defined by U.S. regulators, if TRX is deemed a "security", financing and holding activities must comply with the 1933 Securities Act, or it may constitute illegal issuance.
Moreover, the transaction's operator, Dominari Securities, has close ties with the Trump family, and Eric Trump is expected to hold an important position in the newly established "Tron Inc.". This relationship might also attract U.S. regulatory attention.
From a financial perspective, TRX's "consensus basis" and "safe-haven attributes" are far inferior to Bitcoin. TRON's operation appears more like using a listed company's shell resources to speculate on cryptocurrency market value. Its core risk is betting with high leverage on an asset with fragile liquidity, unclear regulatory definition, and lacking independent value support. Once the market environment reverses or regulation tightens, the bubble will burst.
