A couple of days ago, I was discussing the issue of stock buybacks with Brother Kan @tktang88. He explained from the perspective of traditional enterprises that stock buybacks lead to a reduction in circulating shares and an increase in EPS. More importantly, traditional companies' buybacks are often accompanied by an increase in earnings, which is mainly a sign that the company is making money. This greatly helps market confidence.

However, the cryptocurrency industry is completely different. Buybacks in cryptocurrency are not necessarily related to revenue, and there are no financial reports, so the real earnings situation is completely unknown. More importantly, for users, buybacks in cryptocurrency are seen as a way to pump the price.

But for cryptocurrency companies, buybacks do not equate to price pumping.

Some companies even hope to stimulate the market and increase user purchases through buyback announcements, but today's users are not fools. The main point is that circulating supply is not the core factor determining price in the cryptocurrency field.

In most cases, once the market learns about a project's buyback, it is more likely to sell directly to the project during the buyback. Moreover, many project buybacks are done secretly, and it is even unclear whether they are genuinely buying back.

This is also the tragedy of the cryptocurrency industry in terms of application and compliance. Those that can generate revenue cannot openly conduct buybacks and dividends, while many projects claiming to be buying back are actually just harvesting profits from users.

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