Fold, a bitcoin-focused financial services provider, has announced plans to go public via a merger with special purpose acquisition company (SPAC) FTAC Emerald Acquisition Corp. (EMLD).
Fold, known for its cash-back debit card and bitcoin trading services, is seen as a modest competitor to Block’s (SQ) Cash App, which also offers bitcoin trading and crypto cash-back rewards.
The merger is scheduled to close in the fourth quarter of 2024, pending regulatory approvals, valuing Fold at $365 million. Once finalized, Fold’s shares will be listed on the Nasdaq.
Fold’s Bitcoin Holdings: A Strategic Asset
An attractive aspect of Fold’s business is its large bitcoin (BTC) holdings. Following the transaction, Fold is expected to have more than 1,000 BTC on its consolidated balance sheet. Based on the current bitcoin price of nearly $66,000, this would value Fold’s holdings at about $66 million. The company plans to use these assets to boost operational growth and expand its war chest.
Once Fold becomes a public company, it will join the ranks of well-known companies with large bitcoin reserves. MicroStrategy (MSTR) leads with 214,400 bitcoins, worth about $14 billion, while Block holds 8,038 bitcoins, worth more than $530 million as of the most recent valuation.
Market Optimism and Rising Bitcoin Value
Rising optimism around spot bitcoin exchange-traded funds (ETFs), the bitcoin halving event, and the U.S. presidential election has driven bitcoin prices higher in 2024. This surge has had a positive impact on the stock performance of companies holding large bitcoin reserves. Bitcoin has appreciated by about 49% year to date, while MicroStrategy’s stock price has soared nearly 165% over the same period.
With Fold’s planned public listing and strategic Bitcoin holdings, the company is poised to capitalize on the market’s growing enthusiasm for cryptocurrencies and blockchain-based financial services.
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