New NASDAQ-listed firm plans to turn Bitcoin into Wall Street's next big reserve
Strive Asset Management has just announced its merger with Asset Entities, creating the first publicly traded Bitcoin treasury company.
The newly combined entity will operate under the Strive's name and will oversee $2 billion of assets. It will also become a NASDAQ-listed company.
The agreement will allow the merged company to carry out aggressive purchases of Bitcoin through new financial products, similar to BlackRock and Grayscale.
Strive Enterprises was co-founded in 2022 by Vivek Ramaswamy and Anson Frericks. The new firm will be led by Strive CEO Matt Cole, who previously managed a $70 billion fixed income portfolio.
Under Cole's leadership, the firm aims to offer a package of strategies, including a Bitcoin-for-equity tax-free exchange, which will be structured under Section 351 of the IRS tax code. The mechanism could draw in as much as $1 billion of Bitcoin from investors looking to defer capital gains taxes.
Other strategies include the acquisition of cash-flowing companies at discounted multiples to strengthen the purchasing capacity for buying more Bitcoin and financial leverage through risk hedging.
Strive Enterprises will own 94.2% of the newly combined public company, while shareholders of Asset Entities will receive a 5.8% share.
Strive is executing a similar playbook to Strategy and Metaplanet in terms of centralizing ownership, utilizing equity and debt financing to accumulate Bitcoin, and treating it as a treasury reserve asset.
Although it could also dilute its equity, it is taking risks to maximize long-term value by aggressively deploying capital in BTC. However, Strive's section 351 tax-free exchange of Bitcoins for equity is different from both Metaplanet and Strategy. If successful, Strive could persuade Bitcoin holders to trade their Bitcoin for equity without having to pay a tax.
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