Adam Back's Bitcoin Standard Treasury Aims to Rival MicroStrategy

Bitcoin Standard Treasury Co. (BSTR), spearheaded by cypherpunk legend Adam Back, is positioning itself to become a major player in the corporate Bitcoin holding arena. The company's mission is to drive real-world Bitcoin adoption and is setting its sights on becoming one of the largest corporate holders of BTC.

BSTR's Strategy

Currently, BSTR holds 30,021 BTC and aims to increase its holdings beyond 50,000 BTC. This ambitious goal puts it on a trajectory to potentially surpass MARA Holdings as the second-largest corporate holder of Bitcoin, trailing only MicroStrategy.

Key Players

• Bitcoin Standard Treasury (BSTR): Led by Adam Back, aims for aggressive BTC accumulation.
• MicroStrategy (MSTR): Currently the largest corporate holder, with just under 629,000 BTC.
• MARA Holdings (MARA): Holds over 50,600 BTC, currently second largest.

Collectively, these three entities control approximately 3.38% of Bitcoin's total fixed supply.

Unique Approach to Treasury Management

Unlike some corporate treasuries that passively hold Bitcoin, BSTR intends to actively manage its assets. This includes:

• Selling puts to accumulate BTC at lower prices.
• Utilizing bitcoin-backed revolvers.
• Employing regulated tri-party custodians for collateral placement.

Back emphasizes a focus on liquidity, security, and scale, stating, "Bitcoin was created as sound money and BSTR is being created to bring that same integrity to modern capital markets."

Bridging Bitcoin and Wall Street

BSTR's strategy includes a SPAC deal with Cantor, incorporating a Bitcoin-denominated private placement of equity (PIPE). The company is also raising up to $1.5 billion in fiat financing to further fuel its Bitcoin acquisition plans.

This landmark deal marks the first time that traditional Wall Street financing has been combined with a Bitcoin-denominated equity offering.

Investment Details

• $400 million in common equity at $10 per share.
• Up to $750 million in convertible senior notes (30% conversion premium, $13 per share).
• Up to $350 million in convertible preferred stock with a 7% dividend and a $13 per share equivalent conversion price.
• CEPO could add up to $200 million from its trust, subject to redemptions.

According to Back, this strategy aims to maximize bitcoin ownership per share while accelerating real-world bitcoin adoption.

A First for Bitcoin Treasuries

The in-kind PIPE allows investors to deliver BTC at closing, potentially capturing upside early. Sean Bill, BSTR's CIO, envisions the company as "the Berkshire Hathaway of Bitcoin," actively managing its treasury and pursuing strategic acquisitions within the Bitcoin ecosystem. BSTR aims to integrate Bitcoin into mainstream finance, showcasing a 25,000 Bitcoin commitment and the first Bitcoin in-kind Equity PIPE in the United States.

Key Takeaways:

• BSTR aims to become a leading corporate Bitcoin holder.
• Active treasury management strategies are planned, prioritizing security and liquidity.
• The company is bridging Bitcoin and traditional Wall Street finance.
• The deal is expected to close in the fourth quarter, with the company trading under the reserved ticker BSTO.