In one day, two Bitcoin-related companies will go public in the U.S. stock market through mergers.
It is worth noting that both companies are closely connected to the current President of the United States, Trump. One is a company in which his son has invested, while the other was founded by Trump's cryptocurrency advisor.
Trump's cryptocurrency landscape expansion
On Monday, a company named 'American Bitcoin' announced a merger with Gryphon Digital Mining (GRYP.O). This company was only established in March of this year, mainly funded by the U.S. Bitcoin mining company Hut 8 and members of the Trump family.
According to an announcement from Hut 8, Hut 8 has strategically invested almost all of its ASIC miners into the U.S. data center company founded by Eric Trump and Donald Trump Jr., then renamed the company 'American Bitcoin.' It is reported that in this transaction, Hut 8 acquired 80% equity of the new company and became the exclusive supplier of mining hosting and management services.
Just two months after its establishment, 'American Bitcoin' will merge with another Bitcoin mining company, Gryphon Digital Mining (GRYP.O), through an all-stock exchange. As a result, Gryphon's stock rose 173% at the close on Monday.
Hut 8 stated that the transaction is expected to be completed as early as the third quarter of this year. The merged company will continue to operate under the 'American Bitcoin' brand and will trade on the Nasdaq under the code 'ABTC.' The board and management team of American Bitcoin will continue to lead the newly merged company, including Eric Trump serving as Chief Strategy Officer. The announcement also revealed that existing shareholders of 'American Bitcoin' are expected to hold about 98% of the merged company’s shares.
Hut 8 CEO Asher Genoot stated, "By pushing 'American Bitcoin' public, we expect to directly obtain dedicated growth capital independent of Hut 8's balance sheet while retaining shareholders' opportunities for long-term gains from Bitcoin appreciation."
It’s worth mentioning that in Hut 8's quarterly report released last week, revenue was only $21.8 million, a nearly 58% drop year-over-year. Meanwhile, net losses reached $134 million, compared to a profit of $250 million in the same period last year. The company explained that the decline in revenue was mainly due to the 'halving' of Bitcoin mining revenue and operational downtime caused by upgrading mining machines. Although the halving event occurred last April and happens every four years, its impact on 'mining' often lasts for a long time.
Eric Trump has stated that this move is part of a broader strategy to solidify the country’s leadership position in the global Bitcoin mining race. He maintains a distance from his father's government but clearly states that he believes the U.S. must maintain a competitive edge in the cryptocurrency space.
"We won the space race. We better win the crypto race," he said.
A company affiliated with Trump's cryptocurrency advisor will go public through a reverse merger.
Just as the Trump family intensifies its involvement in the cryptocurrency space, his 'inner circle' also has new moves.
Also on Monday, healthcare company Kindly MD announced its merger with Nakamoto Holdings. Kindly MD's stock rose 251% at the close on Monday.
'Nakamoto Holdings' is a Bitcoin investment company founded by David Bailey, an important cryptocurrency advisor to Trump. The main business of such companies is to raise funds through equity financing or bond issuance to purchase and hold Bitcoin, providing investors with another way to bet on the cryptocurrency market.
The boards of Nakamoto Holdings and Kindly MD have unanimously approved the transaction resolution, which still requires approval from the latter's shareholders to be completed. The announcement indicates that this transaction includes a total revenue of $510 million obtained through a public equity private placement, with a placement price of $1.12 per share, covering Kindly MD's common stock and pre-paid warrants, while also raising a total of $200 million through the issuance of priority secured convertible bonds maturing in 2028.
It is reported that the financing is expected to be completed in sync with the merger transaction. Kindly MD's stock will continue to trade on the Nasdaq market under the stock code 'KDLY', and will be renamed and adopt a new stock trading code after the transaction is completed.
Reportedly, Bailey named the company Nakamoto to honor the anonymous founder of Bitcoin. The company focuses on acquiring and holding Bitcoin. Insiders reveal that Nakamoto plans to acquire companies around the world, including in Brazil, Thailand, and South Africa, and invest its held Bitcoin into these companies. Insiders state that the enterprise has the backing of numerous well-known investors, and its advisory board includes many prominent figures.
According to an announcement from Nakamoto, the company plans to establish the world's first network of Bitcoin reserve companies.
"Traditional finance and the native Bitcoin market are accelerating their integration. The securitization of Bitcoin will reshape the global economic landscape. We firmly believe that in the near future, Bitcoin assets will be allocated on the balance sheets of both public and private institutions," said company founder Bailey.
The official announcement promises to 'provide investors with Bitcoin (BTC) market risk exposure within a compliant and transparent framework.'
Bailey also stated that the merged entity he will lead plans to integrate Bitcoin into equity, debt, preferred shares, and 'innovative hybrid structures' to 'push Bitcoin to a central position in the global capital markets.' He further emphasized: 'Our mission is very clear: to list these financial instruments on major exchanges worldwide.'
As a typical 'Trump deal', the entire business relies completely on the policies of the company's executive father, President Donald Trump. In March of this year, he signed an executive order demanding the establishment of a Bitcoin strategic reserve and a repository for storing other assets. While this move fulfilled his election promise, 'crypto enthusiasts' generally believe the policy details fell short of expectations.
While the Trump family's 'cryptocurrency business' can bring about significant market volatility, it is likely to be difficult for the general retail investors watching from the sidelines to gain any benefits.
For example, according to blockchain analysis company Chainalysis, among nearly 2 million digital wallets that purchased the token 'TRUMP' launched earlier this year by the Trump team, 58 wallets made at least $10 million in profit, with total earnings reaching $1.1 billion.
Meanwhile, 764,000 wallets that purchased the U.S. President meme coin are in a losing position with this investment.
The project operator previously stated that Trump would host a dinner inviting the top 220 investors by coin holdings. Additionally, the top 25 holders have the chance to participate in a 'White House tour.' This action has also sparked widespread questioning of Trump's 'monetizing his presidency.'
During the campaign, the President repeatedly promised to support American Bitcoin miners, including telling executives in a closed-door event at Mar-a-Lago that all Bitcoin should be minted on American soil in the future.
The government's latest executive order eases environmental restrictions and encourages more fossil fuel development, which is a boon for oilfield miners, although critics warn that this could come with huge climate costs.
The crypto market reacted little. Bitcoin's trading price is around $104,000, remaining basically flat over the past 24 hours.
American Bitcoin is being spun off from Hut 8's broader energy and artificial intelligence infrastructure platform to separate its mining business and release new capital.