Investors Lose Confidence in GD Culture Amid Bitcoin-Driven Stock Market Concerns

Shares of GD Culture Limited experienced a significant drop in early trading on September 17, 2025, following the company’s announcement of a share exchange deal aimed at acquiring 7,500

as part of its continued efforts to expand its digital asset holdings. This decision has triggered worries among investors regarding possible dilution of existing equity, especially in light of the company’s previous financial history and currently elevated debt-to-equity levels. The purchase will be financed through a private placement of additional shares, resulting in an increase in the company’s total outstanding shares.

The business, which mainly focuses on the cultural entertainment industry, revealed that the 7,500 bitcoin—estimated to be worth around $187.5 million based on recent market prices—would be acquired by issuing new shares at a price well below the average price over the last 30 trading days. This method of valuation has drawn criticism from industry experts, who warn that such a steep discount may undermine the value for current shareholders. “The pricing mechanism seems to benefit private investors more than existing shareholders,” commented one independent analyst. “While such deals are typical for companies with heavy leverage, they may drive away retail investors.”

Amid the drop in share price,

reaffirmed its belief in the strategic direction, highlighting the long-term advantages of holding bitcoin as a safeguard against wider economic risks. The company also mentioned that it has already started implementing blockchain solutions in its operations and plans to utilize the expanded digital asset reserves for both promotional and payment uses in the near future. Nonetheless, a specific timeline or expected financial returns from this investment was not disclosed.

Uncertainty surrounding regulation in the cryptocurrency sector continues to pose challenges for firms like GD Culture. While the company has not announced any modifications to its compliance measures, several analysts have pointed out the significant risks tied to managing such a large, volatile asset within a more traditional business environment. Chinese regulators remain wary of cryptocurrencies, with the central bank recently reiterating its concerns about market stability and consumer protection.

The market’s response to the news reflects broader doubts about equity funding strategies among companies in high-risk industries. GD Culture’s stock price slipped close to 9% within the opening two hours of trade, and some short sellers are reported to have increased their exposure after the announcement. The shares had already been under downward pressure in preceding months due to falling revenues from the company’s main operations and higher borrowing costs. For the second quarter of 2025, GD Culture posted a net loss, marking three consecutive quarters in negative territory.

Despite near-term market worries, company executives remain positive about the future benefits of the bitcoin acquisition. Management has stated the bitcoin will be held as a long-term investment rather than for immediate trading gains, and further updates regarding governance and capital structure are expected in the coming months. Nevertheless, investors are likely to wait for evidence of a turnaround in the company’s core business before increasing their support.