425: Fold, a Bitcoin Rewards Company, to Go Public via SPAC, Aiming to Accumulate Substantial Bitcoin Treasury

Fold, a company that integrates Bitcoin rewards into everyday financial activities, is set to go public via a SPAC transaction with FTAC Emerald Acquisition Corp., with plans to aggressively build its Bitcoin treasury.

Summary

• Fold, founded in 2019, is going public via a SPAC transaction with FTAC Emerald Acquisition Corp.
• Fold integrates Bitcoin into personal finance by offering rewards in Bitcoin for spending and bill payments.
• Customers have earned over $45 million in Bitcoin through rewards, compared to $20 million if distributed in cash.
• Fold aims to build a substantial Bitcoin treasury through financial engineering and Bitcoin-native revenues.
• The company plans to launch new products, including credit and loans, that recognize and embed Bitcoin.
• Fold differentiates itself by being a Bitcoin company with Bitcoin on its balance sheet, unlike traditional companies that merely add Bitcoin as a treasury asset.
• The company views itself as a Bitcoin miner without the overhead costs associated with traditional mining operations.
• Fold intends to meaningfully multiply its Bitcoin holdings through financial engineering efforts after going public.
• The company aims to become a major financial services company focused on Bitcoin, offering a banking platform with Bitcoin's power behind it.
• Fold is launching a slew of products that give access to long-term appreciation of Bitcoin and give access to Bitcoin revenues to come in.

Sentiment

Score: 8

Explanation: The document presents a positive outlook for Fold, highlighting its innovative business model, growth potential, and strategic plans for the future. The management's comments and the overall tone suggest confidence in the company's ability to succeed in the public markets.

Positives

• Fold's customers have earned over $45 million in Bitcoin rewards, significantly more than if they had received cash.
• The company aims to build a substantial Bitcoin treasury, leveraging financial engineering and Bitcoin-native revenues.
• Fold plans to launch credit and loan products that integrate Bitcoin, offering customers better terms and access to Bitcoin's upside.
• Fold differentiates itself by being a Bitcoin company with Bitcoin on its balance sheet, generating Bitcoin natively through its operations.
• Fold views itself as a Bitcoin miner without the overhead costs, competing for the existing Bitcoin supply.
• The company intends to meaningfully multiply its Bitcoin holdings after going public.
• Fold aims to become a major financial services company focused on Bitcoin, offering a banking platform with Bitcoin's power behind it.
• Fold is launching a slew of products that give access to long-term appreciation of Bitcoin and give access to Bitcoin revenues to come in.

Negatives

• The document does not explicitly mention any negatives, but the forward-looking statements section highlights general risks associated with SPAC transactions and market conditions.

Risks

• The proposed transaction may not be completed in a timely manner or at all.
• Failure to satisfy conditions to the consummation of the proposed transaction, including stockholder approval and regulatory approvals.
• Failure to realize the anticipated benefits of the proposed transaction.
• The effect of the announcement or pendency of the proposed transaction on Fold's business relationships.
• The outcome of any legal proceedings related to the business combination agreement.
• The ability to maintain the listing of FTAC Emerald's securities on the NASDAQ.
• The ability to address the market opportunity for Fold's products and services.
• The risk that the proposed transaction may not generate the expected net proceeds.
• The ability to implement business plans and realize additional opportunities.
• The occurrence of any event that could give rise to the termination of the business combination agreement.
• The risk of downturns, new entrants, and a changing regulatory landscape in the competitive industry.
• Those factors discussed in FTAC Emerald's filings with the SEC under the headings Risk Factors.

Future Outlook

Fold intends to aggressively build its Bitcoin treasury and launch new products that integrate Bitcoin into various financial services, aiming to become a leading Bitcoin-focused financial services company in the public markets.

Management Comments

• Will Reeves: 'We could create a business where our customers stack and we stack Bitcoin. And overall were both going to be in a better spot.'
• Will Reeves: 'Fold is a Bitcoin miner that has no exposure to the depreciation of hardware, has no exposure to the price of electricity, and were not competing for the 6% of Bitcoin that has yet to be mined, were competing for the 94% of Bitcoin that has already been mined and is already circulating.'

Industry Context

The announcement comes amid increasing interest in companies holding Bitcoin on their balance sheets, following examples like MicroStrategy, Semler Scientific, and DeFi Technologies. Fold aims to differentiate itself by being a Bitcoin-native company, generating Bitcoin through its core business operations, rather than simply holding it as a treasury asset.

Comparison to Industry Standards

• MicroStrategy has pioneered the Bitcoin treasury strategy in public markets, but its core business is separate from Bitcoin.
• Semler Scientific and DeFi Technologies have also adopted Bitcoin treasury strategies.
• Bitcoin miners like Marathon Digital Holdings and Riot Platforms focus on mining new Bitcoin, while Fold aims to acquire existing Bitcoin through its business operations.
• Traditional financial institutions are hesitant to recognize Bitcoin as an asset in personal financial statements, creating an opportunity for Fold to offer Bitcoin-integrated financial services.

Stakeholder Impact

• Shareholders: Potential for increased value through the growth of Fold and its Bitcoin treasury.
• Customers: Access to innovative financial products that integrate Bitcoin and offer potential financial benefits.
• Employees: Opportunity to work for a growing company in the Bitcoin space.
• The public: Increased awareness and adoption of Bitcoin through Fold's accessible products and services.

Next Steps

• FTAC Emerald and Fold intend to file a registration statement on Form S-4 with the SEC.
• A proxy statement/prospectus will be sent to all FTAC Emerald stockholders.
• FTAC Emerald stockholders will vote on the proposed transaction.
• The parties will seek to satisfy the conditions to the consummation of the proposed transaction, including regulatory approvals.
• Fold will launch new products that integrate Bitcoin into various financial services.

Key Dates