A merger agreement has been reached by Strive asset Management with Asset Entities Inc., paving the way for a significant transformation into a treasury firm centered around Bitcoin.
A target of $1 billion in capital has been set by Strive, with distinctive strategies being leveraged to enhance exposure to Bitcoin.
As stated on May 7, the agreement will result in the merged entity operating under the Strive name and being continuously traded on NASDAQ.
It was stated by the firm that the initiative would result in the establishment of the first publicly traded asset manager entirely aligned with the Bitcoin Standard.
“Strive intends to use all available mechanisms, including novel financial strategies not used by other Bitcoin treasury companies, to maximize its exposure to Bitcoin. We believe that Bitcoin is the hurdle rate and we intend to evaluate all corporate capital deployment on whether it outperforms Bitcoin.”
Strive CFO Ben Pham stated:
Exchanging Equity for Bitcoin
One approach advocated by the firm involves the provision of company equity in return for Bitcoin, with the structure designed to prevent the occurrence of a taxable event for BTC holders.
The acquisition of undervalued or overcapitalized companies is also being targeted by Strive, with the objective of obtaining cash at a reduced value.
The firm’s balance sheet is expected to be reinforced, and its capacity to acquire Bitcoin expanded, by utilizing its internal expertise in fixed income and derivatives.
Through this strategy, up to $1 billion in capital is being targeted by Strive via equity and debt offerings to expedite its Bitcoin accumulation efforts.
In the meantime, a reverse merger structure has been implemented to provide the combined entity with immediate access to capital markets, thereby bypassing numerous regulatory delays commonly associated with public offerings. This added flexibility is anticipated to facilitate the firm’s accelerated growth strategy and align shareholder interests with the Bitcoin treasury vision.
Growing Momentum Behind Bitcoin Treasury Adoption
A broader trend of corporate adoption of Bitcoin has been followed by Strive through its strategic pivot.
In recent months, significant interest in acquiring the leading cryptocurrency has been demonstrated by several companies, including the major banking institution Cantor Fitzgerald through its partnership with Tether.
At approximately the same period, plans were announced by Japan’s Metaplanet to establish a U.S. subsidiary dedicated to the accumulation of Bitcoin.
These companies are being recognized as part of an expanding cohort seeking to compete with Strategy (formerly MicroStrategy), the software firm credited with initiating the public Bitcoin Treasury model.
This surge of institutional interest has been regarded by analysts at Bernstein as ongoing. An estimated $330 billion in corporate inflows into Bitcoin over the next five years has been projected by the firm, with Strategy anticipated to remain at the forefront, while emerging entities such as Strive are expected to attempt to mirror its achievements.
