The original article "Stablecoin Treasury Company" was compiled by Odaily Planet Daily jk.
Original author: Matt Levine is a Bloomberg opinion columnist who covers finance, ranking first in Bloomberg Financial Opinion for many years. He was an editor at Dealbreaker, served in Goldman Sachs' investment banking department, served as an M&A attorney at Wachtell, Lipton, Rosen & Katz, and served as an assistant judge on the U.S. Court of Appeals for the Third Circuit.
Stablecoin asset allocation strategy?
Here's a trading method:
You open a company and issue 100 shares at $1 per share, raising a total of $100. Use that $100 to buy ______.
Now the company has $100 worth of ______ on its books, nothing else, and a net worth of $100. The market is bullish on ______, with the stock price rising to $2 per share (a 100% premium to net assets) and a market capitalization of $200.
You issue another 50 shares for $2 each and raise another $100. Take that $100 and continue to buy ______. Now have $200 worth of ______ in hand and $200 in net worth.
150 shares outstanding at $1.33 per share. The stock price continued to rise to $2.66 per share (still a 100% premium to net assets), with a market capitalization of $400.
You issue another 50 shares at $2.66 each, raise $133, and continue to buy ______.
Shareholders were overjoyed: "The company continues to increase its holdings of ______ per share and uses clever capital management strategies to compound the growth of shareholder value." So it should trade at a premium to net assets, because you can only get a fixed amount ______ buy it directly, but you can get a growing ______ share of the company's shares. "
Is there a loophole in this logic? Let's discuss. If you fill in "Bitcoin" in the ______, it is MicroStrategy's gameplay, which has indeed worked for a long time with a large amount of money, although the premium has narrowed recently. MicroStrategy has been so successful that it has attracted a bunch of followers, some hoarding Bitcoin, some hoarding Ethereum, Trump Coin, Dogecoin, gold or GameStop stock.
Ideally, you should have something interesting and energetic in your ______; I said before that it should be "crypto-related". But I want to emphasize that what you put in your ______ doesn't really matter. The core of this whole transaction is capital operation: as long as you can issue shares to buy assets at a premium, you can increase your net assets per share, which in turn justifies the premium. The price increase of the purchased asset is of course tailwind, but it is not necessary. This strategy works for anything of value.
For example, money itself has value. How about "I issue shares at a premium and deposit money in the bank, because the premium issue allows me to continue to issue shares at a premium"? Discuss it! Wouldn't this be too opportunistic? What about stablecoins? Stablecoins must be crypto-related. "I issue shares at a premium to engage in crypto asset allocation, and the crypto tokens put into the asset library are US dollar stablecoins" How about this?
I wish someone would do it, because it's the best and stupidest deal I've ever mentioned in my column. I should quit my job to start a USDT asset management company. As far as I know, no one has done it yet. Today I did receive a press release from StableX Technologies Inc., which changed its name from AYRO Inc. two weeks ago, "to better reflect its strategic transformation and new positioning to focus on investing in the underlying tokens of the stablecoin industry." I'm looking forward to it! The result is not, it is like this:
StableX Technologies, Inc., formerly AYRO, Inc. (Nasdaq: SBLX) ("StableX" or the "Company"), today announced the commencement of purchases of FLUID tokens, the first transaction since the company announced its focus on investing in the underlying token of the stablecoin industry.
"The first purchase of FLUID tokens marks the beginning of a significant new chapter for StableX," said James Altucher, Digital Asset Management Manager at StableX. "In less than a year, FLUID went from zero to the market leader in stablecoin trading, generating millions of dollars in monthly fees and growing the community at an incredible rate. Due to the surge in fees, FLUID has announced that it will use all revenue to buy back tokens starting October 1, 2025, which we believe will be an important catalyst for the price of FLUID to rise. While the purchase of FLUID is StableX's first investment in the stablecoin industry token portfolio, we look forward to providing updates to stakeholders as we execute the planned portfolio expansion process through additional purchases of high-value assets within the stablecoin industry. Our previously announced launch of the strategy of using FLUID as the first purchase highlights the value of acquiring the underlying token of the stablecoin industry. As the industry continues to accelerate, we believe that the token purchase strategy will be the main beneficiary, creating value for all stakeholders. "
Disappointingly, FLUID is not a stablecoin, but rather an equity/governance token for a decentralized crypto lending and trading protocol. StableX is not exactly a stablecoin asset management company, it does not issue shares to buy stablecoins, but to issue shares to buy "tokens that promote the rapid development of the stablecoin industry". But! It's close.
Also, of course:
Traders are buying a corrugated packaging company that wants to buy tokens related to OpenAI boss Sam Altman's iris scanning crypto project, and its stock price has skyrocketed 3,000% in one day.
Eightco Holdings, which makes custom packaging products and has an e-commerce inventory management division, announced on Monday that it will implement a "first-of-its-kind" strategy to acquire the Worldcoin token, a core component of Altman's World digital identity project.
It wants to change the ticker symbol to ORBS (Odaily's note: Worldcoin's spherical hardware for collecting iris data).
Blockchain M&A integration!
Recently, we discussed the topic of "AI M&A integration". "M&A integration" is a buyer buying a bunch of small companies in the same industry, based on the theory that (1) the scale effect is good, and (2) the buyer has some general skills or technologies that can be used in each company to make them more efficient. Traditionally, mergers and acquisitions are operated by private equity funds, and the theory is that the private equity set - financial leverage, cost control, incentive adjustment, and letting Harvard MBA manage the plumbing business - has a wide range of applications and can make many businesses better.
But the recent popularity of AI mergers and acquisitions, usually venture capital operations, is not throwing Harvard MBAs at a bunch of small companies, but generative AI models. More abstractly, the point is that if you have a powerful general-purpose business technology that requires a certain scale and complexity to implement—like AI or leveraged financing—you can apply that technology by making it bigger and more complex, and buy companies that can't, and create value.
Another topic that we used to talk about a lot but haven't talked about for many years is "blockchain, blockchain, blockchain". In my vague memory, the idea was that "blockchain" — the distributed ledger technology popularized by Bitcoin — would revolutionize business and technology. With blockchain technology, banks can... Transfer... The stock exchange can... Trade stocks... I don't know, everyone was really excited at the time, but I really can't remember why. The current consensus is that as soon as ChatGPT comes out, everyone will forget about blockchain. Some theoretical revolutionary potential in blockchain is always in the near future, but generative AI gives you a chat window to answer your questions, which is even more real. Therefore, crypto venture capital has turned to AI venture capital.
But if you're serious about blockchain, there's a way to combine these two topics. The combination method is: blockchain mergers and acquisitions. You set up a private equity fund, raise money, and then go buy a small accounting, pest control, plumbing or whatever. Then use your powerful and complex general-purpose technology – blockchain in this case – to make these businesses more efficient. Because blockchain is so powerful that it is difficult for plumbers or accountants to deploy, you can create a lot of value in this way.
This specific idea has never appeared in my head for a reason, but here is a Wall Street Journal report about someone doing blockchain M&A integration:
New York-based Inversion Labs plans to acquire low-margin companies, equip them with blockchain to improve efficiency, and then reap the profits that come with it......
"The technology is powerful, but the reality is that there aren't that many active crypto users," said Santiago Roel Santos, co-founder and CEO of Inversion. "Our North Star is to make the presence of cryptocurrencies invisible to users. They can't see how the technology works, but they can feel the effects. It will be faster, better, and cheaper. "
Inversion will target private and public companies with a large user base and internal infrastructure that they believe are suitable for blockchain transformation, Dannheim said.
"You can buy and embed products that grow revenue, or you can take down the bad operating system and replace it with a better system based on blockchain," Dannheim said.
Inversion, which initially targeted South American telecommunications companies, has already submitted several acquisition targets. Danheim said blockchain can allow these companies to reduce data procurement costs and other improvements.
Why not. Back in the glory days of blockchain (2017), I received several press releases from Dentacoin (dentist blockchain) every week. Perhaps there are also opportunities for mergers and acquisitions.