In one day, two Bitcoin-related companies will go public in the U.S. stock market through a merger.
It is noteworthy that both companies have close ties to the current U.S. President Trump. One is a company in which his son has invested, while the other is a company founded by Trump's cryptocurrency advisor.
Expansion of Trump's cryptocurrency empire.
On Monday, a company called 'American Bitcoin' announced its merger with Gryphon Digital Mining (GRYP.O). This company was just established in March this year, with major funding from the American Bitcoin mining company Hut 8, as well as members of the Trump family.
According to an announcement from Hut 8, Hut 8 will strategically invest nearly all of its ASIC mining machines into a U.S. data center company founded by Eric Trump and Donald Trump Jr., which will subsequently be renamed 'American Bitcoin.' It is reported that in this deal, Hut 8 acquired 80% ownership in the new company and became the exclusive provider of mining machine hosting and management services for it.
Just two months after its establishment, 'American Bitcoin' will merge with another Bitcoin mining company, Gryphon Digital Mining (GRYP.O), through a full stock swap. As a result, Gryphon's stock closed up 173% 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 be traded 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 disclosed that existing shareholders of American Bitcoin are expected to hold about 98% of the shares of the merged company.
Hut 8's CEO Asher Genoot stated: 'By promoting the listing of 'American Bitcoin', we expect to directly obtain growth capital independent of Hut 8's balance sheet, while preserving shareholders' long-term profit opportunities from Bitcoin's rise.'
It is worth mentioning that in Hut 8's quarterly report released last week, revenue was only $21.8 million, a sharp decline of nearly 58% year-on-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 revenue decline was primarily due to the 'halving' of Bitcoin mining earnings and operational downtime caused by machine upgrades. Although the halving event occurred last April and happens every four years, the impact on 'mining' often lasts for a long time.
Eric Trump has stated that this move is part of a broader strategy to consolidate the country's leadership position in the global Bitcoin mining race. He has kept his distance from his father's government but has made it clear that he believes the U.S. must maintain a competitive edge in the cryptocurrency space.
'We won the space race. We better win the cryptocurrency race,' he said.
The company of Trump's cryptocurrency advisor will go public through a shell company.
Just as the Trump family intensifies its involvement in the cryptocurrency space, his 'close associates' are also taking new actions.
Also on Monday, healthcare company Kindly MD announced its merger with Nakamoto Holdings. Kindly MD's stock closed up 251% on Monday.
'Nakamoto Holdings' is a Bitcoin investment company founded by Trump's key cryptocurrency advisor, David Bailey. 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 the common stock and prepaid warrants of Kindly MD, and also raised a total revenue of $200 million through the issuance of senior secured convertible bonds maturing in 2028.
It is reported that the financing is expected to be completed simultaneously with the merger transaction. Kindly MD's stock will continue to trade on the Nasdaq market under the ticker symbol 'KDLY', and will be renamed with a new stock trading code after the transaction is completed.
It is reported that Bailey named the company Nakamoto to commemorate the anonymous founder of Bitcoin. The company focuses on acquiring and holding Bitcoin. According to insiders, Nakamoto plans to acquire companies around the world, including in Brazil, Thailand, and South Africa, and invest its Bitcoin holdings into these companies. Insiders also indicated that the enterprise has received support from numerous well-known investors, and the advisory board includes many notable individuals.
According to an announcement from Nakamoto, the company plans to establish the world's first Bitcoin reserve company network.
'Traditional finance and the native Bitcoin market are accelerating their integration. The securitization process 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 the company's founder, Bailey.
The official announcement promises to 'provide investors with exposure to Bitcoin (BTC) market risks within a compliant and transparent framework.'
Bailey also stated that the merged entity he will lead plans to 'push Bitcoin to the core position of the global capital markets' by integrating Bitcoin into equity, debt, preferred stock, and 'innovative hybrid structures.' He further emphasized, 'Our mission is very clear: to list these financial instruments on major exchanges around the world.'
As a typical 'Trump deal', the entire business is fully dependent on the policies of the company's executive's father, President Trump. In March this year, he signed an executive order requiring the establishment of a Bitcoin strategic reserve and a vault for storing other assets. Although this fulfilled his election promise, 'crypto insiders' generally believe that the policy details have not met expectations.
Although the Trump family's 'cryptocurrency business' can cause significant market volatility, it is feared that it will be hard to bring any profits to the many retail investors watching.
For example, in the case of the similarly named token 'TRUMP' launched by Trump's team earlier this year, blockchain analysis company Chainalysis estimates that among nearly 2 million digital wallets that purchased the token, 58 wallets made profits of at least $10 million, with total earnings reaching $1.1 billion.
Meanwhile, 764,000 wallets that purchased the U.S. President meme coin are at a loss in this investment.
The project operator previously stated that Trump will host a dinner inviting the top 220 investors by coin holdings. Additionally, the top 25 holders will have the opportunity to participate in a 'White House sightseeing reception.' This action has also sparked widespread skepticism about Trump's 'monetizing his presidential identity.'
During the campaign, the President repeatedly promised to support American Bitcoin miners, including telling executives at a closed-door event at Mar-a-Lago that all future Bitcoin should be minted on American soil.
The government's latest executive order has relaxed environmental restrictions, encouraging more fossil fuel development, which is a boon for oil field miners, although critics warn that this could come with significant climate costs.
The cryptocurrency market reacted little. Bitcoin's trading price is about $104,000, remaining basically flat over the past 24 hours.
American Bitcoin is being spun off from the 8 Hut's broader energy and artificial intelligence infrastructure platform in order to separate its mining operations and unlock new capital.