Bitcoin Treasury

The basic idea is this: The U.S. stock market is willing to pay $2 for every $1 of crypto assets. If you’re sitting on a large stash of crypto, your smartest play is to merge with a small U.S. public company. That move effectively doubles the value of your crypto overnight. This quirk gives rise to some unusual market dynamics—many of them increasingly stranger. Two, in particular, stand out:

First, if you hold a significant amount of crypto, you’ll need a public company shell. Providing these shells to crypto investors has become a lucrative business—especially for small-cap public companies with minimal existing operations, as they’re easy to pivot into pure crypto holding entities. For example, if you have $100 million in Bitcoin, a merger with a public company could instantly turn it into $200 million. That means you’d happily pay the shareholders $40 million for a company that’s valuable only for its listed status.

Second, if you have a huge crypto position, don’t sell to crypto buyers—sell to the equity markets. Suppose you own 1,000 Bitcoin. Selling on the open BTC market nets $118 million, but packaging it into a listed crypto treasury company could yield $236 million.

On the first point, we often talk about crypto entrepreneurs acquiring small public companies and transforming them into crypto treasuries. But that process is messy and inefficient. If you want to list crypto on an exchange, why waste time negotiating with a defunct biotech company’s executives, hammer out a deal, and then lay off the researchers? Why shouldn’t investment banks offer turnkey public shells so you don’t have to repurpose a biotech/toy/liquor firm into a crypto company—just start fresh?

Of course, that’s already happening. This is the essence of the SPAC (Special Purpose Acquisition Company) business. Cantor Fitzgerald LP (whose former CEO is now U.S. Secretary of Commerce) specializes in this space, running both standard SPAC capital raises and SPACs explicitly designed to merge with Bitcoin treasury pools. Back in April, we mentioned Cantor Equity Partners Inc., a Cantor-backed SPAC that announced a deal with Bitfinex/Tether and SoftBank to package their Bitcoin into a public vehicle. The new company will be called Twenty One Capital Inc., and the SPAC is trading at around a 200% premium to its underlying Bitcoin. Tether and SoftBank get a fantastic deal. So does the SPAC sponsor, Cantor, which collects a significant cut.

Here’s this morning’s press release:

Bitcoin Standard Treasury Company goes public via business combination with Cantor Equity Partners I Inc.

At launch, BSTR will have 30,021 Bitcoin on its balance sheet—making it the world’s fourth-largest public Bitcoin treasury—while securing up to $1.5 billion in PIPE financing, the largest PIPE ever for a Bitcoin treasury SPAC. The SPAC itself will contribute another $200 million (subject to redemption).

BSTR Holdings Inc. (“BSTR” or “the Company”) announced today it has entered into a definitive merger agreement with Cantor Equity Partners I, Inc. (“CEPO”) (NASDAQ: CEPO), a SPAC sponsored by an affiliate of Cantor Fitzgerald, a global leader in financial and real estate services. Upon close, the combined company will trade under the ticker “BSTR”…

Net proceeds will be used to acquire additional Bitcoin and to build out a full suite of Bitcoin-native capital markets products and advisory services.

That’s right—BSTR will hold about 30,021 Bitcoin. If sold on the open market, that’s roughly $3.5 billion. Sold as a listed company, it’s likely worth over $7 billion. Cantor Fitzgerald is in the business of providing public wrappers for Bitcoin pools, so BSTR merged with Cantor Equity Partners I—not the Cantor arm involved with Twenty One—to bring its Bitcoin to Wall Street. BSTR’s Bitcoin fetches a far higher valuation on the stock market than it would as an asset, and Cantor, the SPAC sponsor, takes its share.

But what I really want to focus on is the second odd phenomenon: “If you have a lot of crypto, never sell to crypto buyers.” Cantor Fitzgerald already launched a crypto treasury called Twenty One. Their model: (1) accumulate Bitcoin, (2) maintain a public listing, (3) make grand statements about innovation, the future of money, and Bitcoin capital markets services. BSTR runs the same basic playbook. Both are Bitcoin pools—so why list them independently? Why should investors choose between fundamentally identical, pure-play Bitcoin treasuries? (Not to mention other similar companies and MicroStrategy—my point is that two major Bitcoin pools listed almost back-to-back through Cantor Fitzgerald SPACs.)

Picture this: BSTR shows up at Cantor Fitzgerald and says, “We’ve got a Bitcoin pool and need capital markets advice.” Cantor replies, “Great—our relationship with the Twenty One team is strong. We took them public. They have a huge Bitcoin treasury, robust enterprise infrastructure for Bitcoin-based financial products, and their stock trades at a big premium. Here’s our idea: we arrange for them to issue shares, raise capital, and use it to acquire your Bitcoin pool—at a great price for you. What do you think?”

That’s silly, because BSTR doesn’t want to sell its Bitcoin as Bitcoin. Sell on the BTC market, and you only get spot price; package it into a listed company, and you capture a 100% premium. BSTR wants to list directly, not sell out.

The Financial Times summarized the deal this Tuesday:

According to two sources, Cantor Equity Partners 1—a blank-check company that raised $200 million in its January IPO—is in late-stage talks with Blockstream Capital founder Adam Back to acquire over $3 billion in crypto assets.

This deal echoes the $3.6 billion SoftBank-Tether crypto transaction led by Brandon Lutnick in April, advancing Cantor Fitzgerald’s strategy of using public shells to acquire Bitcoin and capitalize on the U.S. deregulatory wave under President Donald Trump…

Back and Blockstream Capital will swap their Bitcoin for shares in the Cantor wrapper, which will be renamed BSTR Holdings.

In other words, Cantor is “acquiring” Blockstream’s Bitcoin—just as it previously “acquired” SoftBank and Tether’s. But it doesn’t pay cash; it pays with shares in a new public Bitcoin company, which almost always trade at a 100% premium to the underlying asset. Cantor’s “currency”—public Bitcoin shares—is more valuable than cash.

Twenty One has the same “currency”—its stock. You could imagine Twenty One buying Blockstream’s Bitcoin with its stock. But at what price? The core model for Bitcoin treasuries is that Twenty One can sell shares at a premium, raise funds, and buy more Bitcoin—boosting the per-share BTC backing. But Blockstream wants that same premium for its own holdings, while Twenty One doesn’t want to pay up for more coins (it wants to “strategically deploy capital to increase per-share Bitcoin holdings”). Bringing Bitcoin to public markets creates massive value, but every treasury wants to capture that upside themselves.

Is this model sustainable long term? If every large Bitcoin holder can make more money by launching their own listed treasury, how do existing companies keep stacking more coins? There will still be smaller players—if you own 0.1 BTC, you’ll sell to MicroStrategy, Twenty One, BSTR, or someone else. But in the end, I suspect we’ll see share-for-share mergers among these Bitcoin treasuries. Low-premium companies will be acquired by higher-premium ones. I look forward to reading those fairness opinions.

So far, though, BSTR’s debut looks soft: At midday, the SPAC was trading at about $13.93, implying only a 39% premium to BSTR’s Bitcoin—well under the 100%+ I’d expect. Maybe this arbitrage is getting crowded?

Meme Coin Markets: If You Have to Ask, You Don’t Get the “Vibe”

Traditional finance works like this: You’re at a bank, a client asks, “Can you create a tradable instrument X that tracks another value Y?” You have to carefully design how X and Y are linked. Maybe you build an arbitrage loop so holders of Y can swap for X, tethering prices; maybe you create an index of Ys and X is a share in it; maybe you call around daily for Y’s quote and use an average for X’s price; maybe you peg X to Y’s historical level via a non-tradable benchmark. Every scenario is complex—a classic example: “I want a tradable security to track U.S. home prices.” Great idea, but which homes? How do you ensure it reflects real prices?

Crypto, meanwhile, stumbled into a genuine financial innovation: skip all the complexity and build on “vibes.” Announce, “I’m launching HomePriceToken—it tracks U.S. real estate!” A traditional finance veteran asks, “Wait, how does it track home prices?” You reply, “Because it says so—it’s called HomePriceToken. What’s the problem?” If I press for an arbitrage mechanism, you just say, “Don’t overthink it. It’s HomePriceToken.”

This is the meme coin revelation. I joke about it often, but it’s a clever innovation. The meme coin playbook: (1) Pick a name that links to something; (2) The price tracks that thing—not because of arbitrage, but because of the meme. If enough people think about Doge, Dogecoin goes up. That’s it.

The beauty is that anything can now be financialized—even things that aren’t assets. Home prices at least have data (with all the usual illiquidity and aggregation headaches). But meme coins can track summer songs, celebrity popularity, even the health of U.S. democracy. Not in the sense of prediction markets—there’s no objective event to settle on—but in meme coin terms. If DemocracyCoin rallies, democracy is strong. If it falls, maybe not—don’t ask why.

Of course, it’s absurd. But fascinating. Here’s how Taylor Lorenz covered Gen Z meme coin slang:

Every day, 20-year-old college student Boeshi scrolls social media for new slang, tracking words like huzz, soyboy, baddie, and mewing—not just for friendly banter, but to invest and profit.

As Gen Z and Gen Alpha lingo go viral, a full-blown meme coin ecosystem is quietly emerging. Young people are putting real capital into tokens tied to trending catchphrases, hoping to cash in if their chosen memes explode.

“The dumber the slang, the higher the coin price,” Boeshi says. “The more viral the word, the hotter the coin.”

“Is there any arbitrage between word usage and coin price?” I ask—but immediately lose the plot. Boeshi cheerfully ignores me.

In this new attention economy, virality equals market cap. When a slang term is trending, its coin spikes. When it cools off, so does the token. “If a word starts to pop, it matches Google search spikes,” Boeshi explains. “When it fades, so does the chart.” Dozens of meme coins tied to slang are currently tradable on sites like Pump.fun.

Sure. Huzz. Rizz. Skibidi. On a more academic note, here’s a recent study by Alberto Maria Mongardini and Alessandro Mei on meme coin manipulation:

Unlike functional assets like Bitcoin or Ethereum, meme coin valuations rely almost entirely on community sentiment, making them highly susceptible to manipulation. This study analyzes 34,988 meme tokens across Ethereum, BNB Smart Chain, Solana, and Base. It details their tokenomics and tracks three months of growth. Of high-return tokens (>100%), 82.6% show strong evidence of artificial growth strategies designed to fake demand—tactics like wash trading and what the authors call Liquidity Pool-based Price Inflation (LPI), where small strategic buys generate dramatic price spikes. They also document schemes like pump-and-dump and rug pulls, noting most affected tokens had prior wash trading or LPI episodes, showing early manipulation often paves the way for later investor exploitation. The upshot: manipulation is rampant in high-flying meme coins, and those outsized returns are usually the result of coordinated market gaming, not organic trading.

Now imagine launching one of the 17.4% of meme coins that’s actually clean. Almost seems lazy, doesn’t it?

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