Smart Digital Group stock collapsed 88% after vague crypto pivot

27th September 2025 – Smart Digital Group Limited (Nasdaq: SDM) suffered a severe stock collapsed on September 26, 2025. The decline followed the company’s announcement of plans to create a cryptocurrency asset pool. Management said it would invest in Bitcoin and Ethereum to diversify its portfolio and gain exposure to the growing digital economy.

However, the market reacted quickly and negatively. The stock fell from $13.60 to $1.88, dropping nearly 87% in a single day. That made it one of the sharpest declines on Nasdaq this year.

Announcement fails to build confidence

The company framed its crypto strategy as a move to strengthen its position in digital assets. It pointed to Bitcoin and Ethereum as examples of transparency and long-term value.

Despite this, the announcement lacked specifics. There were no details about how much capital would be allocated or where the funds would come from. The company also did not mention any major backers or technical partners.

Because of this, many investors saw the move as unfocused and risky. Rather than reward the stock, they exited fast.

Other companies saw gains. SDM didn’t.

Several other companies have made similar pivots into crypto. In those cases, stock prices surged. For example, Brera Holdings saw a 464% rally after it rebranded and introduced a Solana-based treasury. Juizi Holdings gained 25% when it announced a billion-dollar Bitcoin strategy.

These firms backed their announcements with clear plans, funding, and partnerships. That helped build investor trust.

Smart Digital Group did not follow that example. Its lack of transparency stood out. Investors punished the stock as a result.

Ethereum included, but no clear benefit

The company also added Ethereum to its digital asset pool. Management said Ethereum’s smart contract features offered long-term value.

Still, this did not change the market’s response. Investors showed concern about execution risks, regulatory challenges, and crypto volatility.

The strategy did not connect to the company’s existing business. That made it harder for the market to see the move as credible.

Regulators are paying attention

Meanwhile, regulators have started looking closely at similar announcements. According to the Wall Street Journal, the SEC and FINRA are investigating more than 200 companies that have made crypto-related treasury moves.

Officials are watching for unusual trading patterns before public disclosures. These could suggest insider activity or selective leaks.

Smart Digital Group saw its stock fall after the announcement, not before. Even so, the added scrutiny may make it harder for other firms to pursue similar strategies without consequences.

A strategic misstep

Crypto announcements usually lead to a temporary stock boost. A recent Animoca Brands report said that companies adding crypto to their treasuries saw 150% average gains within a day.

Smart Digital Group hoped to follow this trend. But it failed to present a clear plan. It also failed to convince the market that the pivot fit its overall strategy.

As a result, the stock collapsed. Now the company faces pressure to explain its direction and restore investor confidence.

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KOLsMediaCommunity

$SDM This is actually what all crypto treasury stocks will look like eventually. Although there was a PR today, the same news was already out as a filing on 9/23. Smart Digital Group Limited announced its plan to establish a diversified cryptocurrency asset pool, with a https://t.co/tbLNDaBKG0

JohnL10

@ineedsow

2 days ago

Smart Digital Group Limited $SDM just TOOK A DIVE, like, -84.94% CRASH to $2.05! 💥 Hong Kong marketing vibes got WRECKED on 12.8M shares—probs dilution drama or earnings flop! Deets are SKETCH, but this stock’s VIBES are LOW! https://t.co/t7FkM1mN9H

Romeo👻

@TimeIsM43143700

2 days ago