Strive Asset Management Merges to Create First Publicly Traded Bitcoin Treasury Company

Strive Asset Management, a $2 billion firm with notable investors including U.S. vice president JD Vance and other key figures in Donald Trump’s circle, is embarking on a significant strategic move. The firm is merging with a Nasdaq-listed entity to create the first publicly traded Bitcoin treasury company. This new entity aims to maximize Bitcoin (BTC) exposure per share through innovative and minimally dilutive strategies, positioning itself as a major player in the corporate Bitcoin treasury landscape.

The merger will result in a publicly traded company listed on the Nasdaq, operating under the Strive brand. Following the completion of the deal, Strive plans to issue approximately $1 billion in equity and debt. These funds will be used to build a substantial Bitcoin stockpile, with the asset manager intending to employ all available mechanisms to create a Bitcoin war chest in a manner that is minimally dilutive to common shareholders. The goal is to establish a long-term investment approach designed to outperform Bitcoin.

Strive’s strategy includes raising capital through a unique offering of combined company equity to certain accredited investors in exchange for BTC. This transaction is structured to be tax-free for investors under Section 351 of the U.S. tax code, which allows appreciated assets to be contributed to a corporation tax-free in return for stock. Strive CEO Matt Cole highlighted the significance of this move, stating that it provides a tax-free mechanism for original Bitcoin holders to contribute their assets, avoiding tax gains that would otherwise be incurred.

Corporate Bitcoin treasuries have gained significant traction following the approval of spot BTC exchange-traded funds (ETFs) by the U.S. Securities and Exchange Commission in January 2024. Companies like Strategy, which have pioneered the Bitcoin treasury model, have seen substantial increases in their share prices. Strategy, for instance, now holds 555,450 BTC and recently announced a $21 billion at-the-market common stock offering to acquire more of the cryptocurrency.

This move by Strive Asset Management underscores the growing interest and investment in Bitcoin by corporate entities. The firm’s innovative approach to maximizing BTC exposure and its commitment to a long-term investment strategy position it as a key player in the evolving landscape of corporate Bitcoin treasuries. The merger and subsequent capital raising efforts are expected to further solidify Strive’s position in the market, leveraging the growing interest in Bitcoin as a store of value and investment asset.