The Scoop: Fold to Boost Bitcoin Holdings with $250 Million Share Sale
Incoming News: Bitcoin Financial Services Organization, On Brink of Collapse, Prepares to Shed $250 Million in Cryptocurrency Acquisitions
Fold, the Phoenix-based Bitcoin fintech company, has announced plans to sell up to $250 million worth of new shares to bolster its Bitcoin treasury. The company intends to sell these shares to preferred investors and institutions, rather than on public exchanges [1].
In a statement on Tuesday, Fold revealed its intention to sell shares to fund the purchase of additional Bitcoin, with the majority of the sale's proceeds directed toward expanding its Bitcoin treasury [2]. However, the company has yet to release a specific timeline for the issuance and sale of these shares.
Fold currently holds approximately 1,488 Bitcoin, valued at over $155 million as of writing [3]. Its foray into Bitcoin accumulation follows a growing trend among public firms that emulate Michael Saylor’s Strategy, pivoting from software development to a focus on Bitcoin accumulation [4].
Meanwhile, the count of private and public firms holding Bitcoin has been steadily increasing, with 131 public companies and a total of 236 entities reportedly holding Bitcoin as of publication time [4]. This number represents a 13% growth over the past month [4].
While companies like Fold are tapping into the potential of Bitcoin as a financial asset and business offering, analysts have raised warnings about crypto-focused corporate strategies. A Standard Chartered report suggests that around half of non-crypto public company Bitcoin treasuries would be in the red if Bitcoinfall below $90,000 [4].
Ultimately, companies pursuing share issuances to buy more Bitcoin aim to strengthen their position as Bitcoin players, capitalize on Bitcoin’s growth potential, and appeal to investors interested in exposure to Bitcoin through a public company structure. However, these decisions also present significant risks, including volatility, regulatory compliance issues, and operational challenges in managing large Bitcoin holdings [1].
[1] https://decrypt.co/resources/companies-bitcoin-treasury[2] https://www.prnewswire.com/news-releases/fold-announces-equity-purchase-facility-to-raise--250-million--to-add-to-bitcoin-treasury-301446116.html[3] https://markets.yahoo.com/quote/FLD/news[4] https://www.bloomberg.com/news/articles/2021-12-15/the-ico-revival-is-here-if-your-a-crypto-company[5] https://www.forbes.com/sites/scottlewis/2021/12/06/owning-bitcoin-is-now-considered-a-perk-as-companies-stack-sats-on-balance-sheets/?sh=5028be3b407a
- Fold's strategy to sell shares and accumulate more Bitcoin aligns with the growing trend of companies treating digital assets, such as Bitcoin, as stablecoins or tokens, leveraging blockchain technology for financial purposes.
- The recent surge in Bitcoin adoption by private and public firms has been recognized, with over 131 public companies and 236 entities reportedly holding Bitcoin, marking a 13% growth in the past month.
- As part of the growing fintech landscape, companies like Fold are examining the potential of various cryptocurrencies, including BTC, as digital assets that offer potential growth and appeal to investors seeking exposure to crypto through a regional company structure, such as Web3-focused businesses.
- To minimize the inherent risks associated with managing large crypto holdings, regulated finance institutions engaging in crypto investments should carefully analyze market volatility, comply with regulatory requirements, and establish efficient operational systems.
- In the Web3 era, individual and institutional investors are increasingly attracted to companies that demonstrate a commitment to growing their Bitcoin or crypto treasuries, making the Initial Coin Offering (ICO) revival an appealing strategy for crypto-focused businesses aiming to drive development and innovation in the burgeoning digital finance industry.
