US small-cap stocks are experiencing a short squeeze environment that presents investment opportunities, with "stablecoin" concepts becoming a hotly contested sector among bulls. Digital financial technology group Mercurity Fintech Holding Inc (MFH.US) has garnered significant attention in this space.
On July 29, MFH announced the cancellation of an unfinished offering of common shares and warrants due to market conditions and unforeseen challenges that prevented meeting delivery requirements. The company's stock price had experienced volatile swings following the initial announcement of the offering. The cancellation decision considered both the high risks from increased volatility and investor confidence, as bullish investors significantly drove up the share price from lower levels, quickly restoring pre-offering valuations without diluting existing shareholders.
On the announcement day, MFH's stock surged 22.73%, with the "short squeeze + stablecoin concept" combination continuing to drive upward momentum.
The current market has fully entered short squeeze territory, with US stocks recently experiencing heightened interest in small-cap investments. Goldman Sachs trading desk data shows July short interest against the Russell 2000 index reached $16 billion, one of the highest levels since 2021. While UBS previously suggested this round of short squeezes had ended, Goldman data indicates squeeze sentiment has not yet peaked.
Recent market action shows short squeezes concentrated in stocks with high short interest, small float, and soaring borrowing costs. Short squeezes are also driven by bullish investor consensus on policy developments and sector prospects, creating multiple resonance effects that continuously push prices higher, forcing shorts to buy at elevated prices and accelerating upward moves.
Stablecoin legalization presents investment opportunities. In July, legislation supporting stablecoin frameworks gained momentum, and Hong Kong's Stablecoin Ordinance takes effect in August. These policies will accelerate RWA (Real World Assets) construction of stablecoin ecosystems, with blockchain application companies receiving the highest attention.
MFH's cancellation of the offering does not impact business operations. Given the current investment environment, two dimensions can unlock shareholder value: short-term squeeze dynamics driving rapid market cap appreciation, and long-term blockchain asset revaluation under stablecoin policies.
**First Dimension: Short-term Squeeze Opportunity**
According to Fintel data, MFH currently has 1.815M shares short interest, representing 4.43% of float, with borrowing costs at 30%. Available shares for borrowing have dropped to just 2,000 shares, fitting the profile for squeeze targets. The company shows large volume followed by low-volume advances, indicating bullish reluctance to sell and continued cost increases for shorts.
Historical squeeze cases include GameStop's (GME) epic battle in 2021, where from January 8-27, shares soared 2,700% in under three weeks as bulls overwhelmed hedge fund shorts. AMC experienced similar dynamics in May-June 2021, with short positions approaching 20% of float creating fertile ground for squeezes, resulting in 5x gains over nine trading days.
However, sustainable long-term uptrends after squeezes require solid fundamentals and earnings prospects, as value investors continue accumulating after short covering. MFH possesses such long-term value characteristics.
**Second Dimension: Long-term Fundamental Value**
MFH's future prospects are driven by dual momentum from real-world applications and capital markets. In real markets, AI-driven blockchain technology maturation enables broader industry applications and commercial scalability. In capital markets, stablecoin legalization will drive investment interest in primary and secondary blockchain markets, particularly for promising targets.
MFH is accelerating blockchain sector positioning in the second half of this year. In June, the company announced an $800 million fundraising plan to establish long-term Bitcoin reserves through institutional-grade custody and on-chain liquidity protocols. In July, MFH secured a $200 million equity credit agreement with Solana Ventures, deeply integrating with this high-throughput, low-fee blockchain ecosystem through staking, validator nodes, and DeFi protocols while investing in Solana-based tokenized and real-world asset platforms.
MFH precisely targets core blockchain application deployment sectors. Under stablecoin legalization, RWA assets face an issuance wave, positioning the company's core landing assets for broad investor attention. Technology and policy advancement will drive both application deployment and blockchain financial asset valuations, creating strong earnings expectations.
Reflecting confidence in long-term prospects, MFH's board approved a share buyback program of up to $10 million over the next 12 months, demonstrating management's commitment to enhancing shareholder returns while building blockchain capital management platforms.
In secondary markets, recent strong price recovery reflects both squeeze dynamics and bullish investor accumulation beyond technical factors.
In summary, MFH remains in short-term bullish trends as squeeze conditions persist, with high short interest, small float, and rising borrowing costs making such targets preferred by capital flows. As a pure-play stablecoin concept stock, it continues attracting both short and long-term capital. Long-term investment value stems from continued investment in core blockchain application deployment sectors, with clear policy and fundamental expectations driving sustained valuation appreciation and shareholder value creation.