In brief
- Anthony Pompliano’s ProCap plans to leverage its Bitcoin holdings to “implement risk-mitigated solutions to generate revenue and profits.”
- The firm says it will hold $1 billion in Bitcoin once a proposed merger is completed.
- Bitcoin treasury firms are a hot trend, but analysts have raised concerns about the dynamic’s sustainability and the ultimate market impact.
Social media personality and crypto investor Anthony Pompliano unveiled a $1 billion merger on Monday to create ProCap Financial, a Bitcoin-native financial services firm that will soon join a growing list of companies stockpiling the asset on the Nasdaq.
Pompliano, who began promoting ProCap in April, said on X, formerly Twitter, that he had recently raised $750 million from “leading institutional investors on Wall Street” for the blank-check firm, alongside heavy hitters in the cryptosphere.
“It’s time to get to work,” Pompliano said, noting that ProCap will develop “products and services to produce revenue and profit from the bitcoin on our balance sheet over time.”
ProCap will merge with Columbus Circle Capital, which trades on the Nasdaq under the ticker name CCCM, ProCap said in a press release. Entities in the proposed transaction raised $516 million in equity and $235 million through convertible notes, the firm added.
Pompliano’s announcement comes amid a sharp uptick in firms adding Bitcoin to their balance sheets, including Trump Media’s $2.5 billion raise to buy Bitcoin last month, and GameStop’s recent adoption of Bitcoin as a treasury reserve asset. Although many firms are simply buying Bitcoin and holding it, Pompliano underscored in a statement that capital will be put to work.
“Our objective is to develop a platform that will not only acquire bitcoin for our balance sheet, but will also implement risk-mitigated solutions to generate revenue and profits from our bitcoin holdings,” he said.
Bitcoin-buying firms like Strategy, formerly MicroStrategy, have been able to transform themselves over time. In a recent note from Coinbase, however, analysts warned that the trend may not be sustainable and could one day yield “systematic risks” for the entire crypto sector.
The logic goes that a sharp drawdown in Bitcoin’s price could force these firms, which often turn to debt to fund purchases, could be forced to sell the asset en masse.
Worldwide, 134 public companies have purchased 835,000 Bitcoin worth $85 billion, according to Bitcoin, according to Bitcoin Treasuries. Bitcoin was changing hands around $102,000 on Monday, a 2.2% increase over the past day, according to crypto data provider CoinGecko.
Edited by James Rubin
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