Cronos (CRO 66.29%) is flying higher on Wednesday, up 20.6% in the last 24 hours as of 3:49 p.m. ET. The spike comes as the S&P 500 and the Nasdaq Composite made modest gains.
Cronos, Crypto.com's digital token, is continuing to rise after it was revealed yesterday that Trump Media & Technology and Crypto.com are teaming up to create a new entity that the companies will take public.
A new Cronos accumulation company is coming
Trump Media is teaming up with Crypto.com to form a new venture that will go public through a merger with Yorkville Acquisition, a special purpose acquisition company (SPAC). The new entity will trade under the ticker MCGA and will acquire Cronos as a treasury asset.
The deal is structured with $1 billion in CRO tokens, $200 million in cash, $220 million in warrants, and an equity line of up to $5 billion from a Yorkville affiliate. As part of the arrangement, Trump Media will add about $100 million worth of Cronos (CRO) to its balance sheet, while Crypto.com will purchase roughly $50 million in Trump Media stock.
The deal mirrors Trump Media's earlier move to add Bitcoin to its balance sheet, a strategy popularized by Michael Saylor's Strategy. What sets this deal apart is the choice of asset: Instead of Bitcoin or Ethereum -- the typical targets thus far -- Trump Media is moving into Cronos, a far smaller altcoin.
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Look for more established projects
Although the announcement sparked a surge of buying in Cronos, I'd avoid the token for now. The deal is likely to bring sharp swings in price, much like the volatility seen in Trump Media's stock. For crypto exposure, Bitcoin and Ethereum remain the safer bets.
