Winklevoss, Nakamoto-backed Treasury launches with 1,000 BTC
Euro-denominated Bitcoin company Treasury raised initial funding of 126 million euros ($147 million) through a private round led by Winklevoss Capital and Nakamoto Holdings.
According to a Wednesday announcement shared with Cointelegraph, the company used the funds to buy more than 1,000 Bitcoin (BTC) to jumpstart its Bitcoin treasury. Treasury said it aims “to be the first Bitcoin treasury company listed on a primary European exchange.”
Treasury plans to make its way onto the Euronext Amsterdam stock exchange through a reverse listing by merging with lender MKB Nedsense. A reverse listing enables private companies to acquire stock exchange listings without meeting the requirements by merging with already-listed companies.
Treasury founder and CEO Khing Oei told Cointelegraph that the company plans to leverage future equity issuance and convertible debt to increase its Bitcoin holdings. The announcement notes that it plans to use “both equity and debt to accumulate Bitcoin as its primary reserve asset.”
European Bitcoin treasuries on the rise
With an initial allocation of 1,000 BTC, Treasury was catapulted among Europe’s most notable corporate Bitcoin holders. According to BitcoinTreasuries.NET data, Europe’s top corporate Bitcoin treasury is the German firm Bitcoin Group, with 3,605 BTC worth about $400 million at the time of writing.
It is followed by French company Sequans Communications with 3,205 BTC worth about $356 million and UK-based The Smarter Web Company with its 2,440 BTC valued at $270 million. The number of European Bitcoin treasury firms is getting increasingly crowded, with Dutch cryptocurrency service provider Amdax recently announcing that it is preparing to launch a Bitcoin treasury company on Amsterdam’s Euronext stock exchange, like Treasury.
Related: The Bitcoin treasury model is breaking, but Strategy’s isn’t. Here’s why
Bitcoin treasuries are not always a success
While the Bitcoin treasury model is gaining popularity, it is also drawing its fair share of criticism. A recent report by venture capital firm Breed suggested that only a few of these companies will stand the test of time and avoid a “death spiral” that may impact BTC holding companies that trade too close to net asset value.
Select Bitcoin treasury companies and their respective MNAV. Source: Breed
Oei said he viewed excessive leverage as a high risk, adding:
“We are closely monitoring the leverage percentages which competitors have been adopting over the years. The current capital market strategy includes a level of leverage currently lower than our peers.“
Still, as Cointelegraph recently reported, while the number of Bitcoin Treasury firms continues to increase, a number of firms in this category fail to meet expectations. Josip Rupena, CEO of lending platform Milo and a former Goldman Sachs analyst, said in late August that crypto treasury firms pose similar risks to the collateralized debt obligations that triggered the 2007-08 financial crisis.
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