Cypherpunk legend Adam Back is launching what he calls the 'Berkshire Hathaway of Bitcoin.' His new company, Bitcoin Standard Treasury (BSTR), aims to generate conservative returns on a massive Bitcoin reserve using traditional capital market strategies.
The company will debut with approximately 30,021 BTC, valued at over $3 billion. It plans to go public on Nasdaq through a SPAC merger with Cantor Equity Partners I (CEPO).
BSTR will employ conventional tools like covered options writing and market making to generate yield from its holdings. This approach involves selling options contracts to collect premiums and facilitating trades to capture spreads. The company explicitly will not use DeFi protocols, prioritizing low counterparty risk.
The initial Bitcoin reserve comes from founding team members, including Back and affiliates of Blockstream Capital, contributing roughly 25,000 BTC. An additional 5,021 BTC comes from a Bitcoin-denominated PIPE. BSTR has secured significant financing commitments, including $400 million in common equity and $575 million in convertible notes.
The company aims to raise up to $1.5 billion for further Bitcoin purchases after listing. BSTR differentiates itself as a Bitcoin-only operation, contrasting with crypto funds holding multiple tokens. The risk is that covered call strategies may underperform in a strong bull market, capping potential upside.