Crypto Donations to Bitcoin Treasuries: Cypherpunk Move or Corporate Co-Option?

Decentralization purists clash with pragmatists as crypto flows into publicly traded Bitcoin holders. Does funding these entities align with cypherpunk ideals—or just make Wall Street richer?

When Satoshi’s anarcho-capitalist vision meets SEC filings, things get messy. Proponents argue it accelerates adoption; critics call it ’venture socialism’ for hedge funds.

Meanwhile, traditional finance giants quietly add ’blockchain exposure’ to their ESG reports—between martini lunches and private jet emissions.

That is quite the payday considering that Tether reportedly has as few as five owners — four top executives plus Cantor Fitzgerald who recently took a 5% stake (for reasons obviously unrelated to Tether’s non-existent need for capital).

The Cantor investment valued Tether at $12 billion, which means the owners just received a quarterly dividend of 19.5%. 

Tether’s operating profit for the quarter was just $1 billion, so the $2.3 billion dividend cuts into their “equity” buffer and they won’t be doing that every quarter. 

Still, though, 19.5%! 

You can see why Circle reportedly turned down an offer of $5 billion from Ripple this week.

Right. 

Another reason that Congress may prevent stablecoins from paying interest is that the president happens to own a stablecoin issuer.

On stage at Token 2049 today, it was announced that a $2 billion transaction between Binance and the state-backed Emirati investment firm MGX would be made in USD1, the Trump family stablecoin.

That represents about $80 million of annualized revenue going into the pockets of the issuer for as long as the money stays there.

“Virtually every detail of [the] announcement, made during a conference panel with Mr. Trump’s second-eldest son, contained a conflict of interest,” the New York Times reported. 

Ugh.

It means people are losing their minds again.

The SPAC mania of 2021 revealed what happens when price discovery is left to retail investors: Deals that would never have made it past the first IPO roadshow meeting were rapturously received as “SPACs.”

Special Purpose Acquisition Companies (SPACs) are publicly traded pools of capital created to acquire a private company and take it public — an alternative to the traditional IPO process.

SPAC shares are customarily issued at $10 per share and usually trade somewhere around that level while the managers of the SPAC go looking for a deal. 

After a deal is announced, SPAC shares will trade higher or lower depending on how the deal is perceived by investors. 

Roughly speaking, if a SPAC trades at $11 after announcing a deal, it means that investors expect their stake in that deal will instantly be worth 10% more than the money they’re contributing to it — a reasonable assumption to make.

In the 2021 mania, however, it became common for SPAC shares to trade at $20, $30 or more.

That wasn’t a reasonable assumption to make because it implied that the company the SPAC managers found to buy would be worth far more on the stock exchange than it was a private company.

They almost never were — few SPACs ended up justifying their $10 issue price, let alone the wildly inflated post-deal prices investors insisted on paying in 2021.

It’s hard for me to imagine that it will go any better for the investors currently paying $50 for the Cantor Equity Partners (CEP) SPAC.

Last week, CEP reached a deal with Tether and Softbank to form a new “bitcoin-native company,” Twenty One.

Like Strategy, Twenty One will basically just be a pile of bitcoin with Tether and Softbank’s ownership stake based on how much bitcoin they contribute to the pile.

Current holders of CEP will receive a 2.9% share of that pile in return for their $100 million pot of cash.

This makes the math very simple: Today’s $50 price of CEP implies that investors believe that $100 million of bitcoin is worth $500 million on the stock exchange.

That feels about as crazy as anything that happened in 2021 — which I never expected to see again.

Are we really letting Tether quintuple the value of its bitcoin like that?

Contributing our crypto to bitcoin treasury companies seems like approximately the least cypherpunk thing we could do.

But crypto people are just as excited about it as stock market people.

Number go up, I guess.

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