Written by: Yueqi Yang
Translated by: Block unicorn
According to informed sources, David Bailey, who provided cryptocurrency policy advice to President Donald Trump during the 2024 campaign, is raising $300 million to launch a publicly listed Bitcoin investment company. He is following a series of companies that purchase cryptocurrencies, attempting to replicate Michael Saylor's Strategy success, which has transformed into a Bitcoin investment company.
Bailey is raising $200 million through a private stock issuance and issuing $100 million in convertible bonds for a small publicly listed company. The company name has not been disclosed. Informed sources say these funds will be used to purchase Bitcoin.
Bailey is the CEO of BTC Company, which owns Bitcoin Magazine, Bitcoin Conference, and UTXO Management Company (a cryptocurrency investment firm). Informed sources say BTC Company will ultimately merge with this Nasdaq-listed shell company. According to one source, the company will be renamed Nakamoto, in honor of Bitcoin's anonymous creator Satoshi Nakamoto.
Trump delivered a significant cryptocurrency speech at the Bitcoin Conference in Nashville last July. Bailey stated that he and his team worked with the Trump campaign team to develop cryptocurrency policies and assist with fundraising.
Bailey's transaction could be announced as early as next week, during a time of investor frenzy for publicly listed cryptocurrency acquisition companies, the latest trend in the cryptocurrency market. This complex transaction provides a fast track for cryptocurrencies to enter the public market.
Strategy (formerly known as MicroStrategy until recently) began purchasing Bitcoin in the summer of 2020, becoming the world's largest corporate Bitcoin holder and pioneering this model. Its stock price subsequently soared 3,100%, trading at twice the value of its held Bitcoin, which was worth $54 billion.
This sparked a wave of companies rushing to create imitators. Last month, Japanese tech group SoftBank and stablecoin issuer Tether announced the launch of Twenty One, a $3.6 billion Bitcoin investment company, through a merger with a special purpose acquisition company created by Cantor Fitzgerald. Two other companies—Nasdaq-listed real estate platform Janover and consumer goods company Upexi—have transformed into Solana token investment companies. Since their announcements, these companies' stock prices have risen significantly.
These stocks are popular with investors because they offer a simple way to gain cryptocurrency exposure without the hassle of holding tokens. Many companies issue debt to fund cryptocurrency purchases, effectively using leverage to amplify returns. Their fundraising scale means they are now competing with cryptocurrency risk funds for institutional capital.
"This is becoming a very big trend. It's almost like Wall Street's SPAC frenzy has swept through the cryptocurrency sector," said podcast host and cryptocurrency angel investor Frank Chaparro, who invested in Upexi. He said one attractive aspect of these stocks is that cryptocurrency companies holding them can more easily obtain financing, as they can use stock holdings as collateral to obtain funds from banks or traditional prime brokers that do not accept cryptocurrencies as collateral.
However, these stocks also carry risks. If Bitcoin prices fall, their decline could be more significant due to leverage. If debt matures and cannot be refinanced, these companies might be forced to sell their held Bitcoin or cryptocurrencies to repay debt.
Pantera Capital, led by former Tiger Management executive Dan Morehead, is one of the cryptocurrency funds betting on such companies. According to Cosmo Jiang, a general partner at Pantera, the fund recently made a "nine-figure investment" in Twenty One Capital's private issuance. "We are optimistic because we believe these are innovative companies, and the equity market clearly has strong demand for them," he said.
Stocks like Strategy gain additional momentum when trading at prices higher than their underlying assets. This means that when they issue stocks, they can purchase more Bitcoin for each dollar raised. Cosmo Jiang said: "These stocks can trade at a premium because they can increase Bitcoin per share over time."
The reverse is also true. Matthew Sigel, head of digital assets research at VanEck, said: "If their trading price is lower than their Bitcoin value, their business model might have problems. They can no longer issue stocks at market prices to buy Bitcoin." He added: "They're somewhat like hedge funds operating within listed companies."
VanEck and Bitwise, two asset management companies issuing Bitcoin ETFs, are also embracing these investment companies by launching new ETFs that will invest in a portfolio of stocks holding cryptocurrencies as part of their fiscal strategy.
Trump promised in his Nashville speech to make the US the "global cryptocurrency capital" and establish a national strategic Bitcoin reserve. He said cryptocurrency rules would be more industry-friendly.
The cryptocurrency industry has been a major contributor to Trump's campaign. Trump and his family have profited by selling meme coins and establishing a stablecoin, which was used by a Middle Eastern sovereign wealth fund for a $2 billion investment, causing a stir in Congress.
Upexi CEO Alan Marshall said his company, originally in consumer brands, decided to move towards purchasing Solana this year because the friendly regulatory environment under the Trump administration eliminated the risk of Solana tokens being classified as unregistered securities by the SEC. He said: "This was the final factor driving us in this direction. The new government cleared the way, allowing you to participate in Solana and other cryptocurrency assets without violating securities regulations."
For example, Freight Technologies, a logistics company facilitating trade between the US and Mexico, announced last week that it would raise up to $20 million to purchase Trump meme coins, following Trump's announcement that he will invite the largest holders of his meme coins to dinner later this month. The company's CEO, Javier Selgas, stated in a press release that his company is purchasing these tokens because he wants to advocate for "fair, balanced, and free trade between the US and Mexico".
