Bitcoin’s New Tax-Free Bridge to Equities Just Rewrote the Rulebook

Wall Street’s latest workaround? A Bitcoin treasury vehicle that lets traders swap BTC for stocks without triggering capital gains—because why pay taxes when loopholes exist?

The mechanics: This synthetic instrument mirrors traditional equity exposure while dodging the IRS’s grasp. It’s the financial alchemy purists hate and pragmatists will exploit.

Cynical take: Another ’innovation’ that benefits whales while regulators scramble to define the playing field—classic crypto-finance theater.

Bitcoin Treasury Model Explained: Strive Management’s New Approach to Digital Asset Holdings

Asset Entities and Strive Asset Management are joining forces to create, at the time of writing, a pioneering Bitcoin Treasury company. The joint venture, operating under the Strive brand, also aims to raise up to $1 billion in capital for Bitcoin acquisition through such an innovative tax structure.

Arshia Sarkhani, President and CEO of Asset Entities, stated:

Tax-Free Exchange Innovation

The newly formed Bitcoin Treasury company introduces, for the first time ever, a groundbreaking approach where investors can contribute their Bitcoin holdings directly in exchange for company stock. “This BTC Treasury strategy structures itself as tax-free under Section 351 of the US tax code, allowing investors to transfer assets without triggering immediate tax liabilities, and this is really something that many investors have been waiting for.

Ownership Structure and Funding

Under the Bitcoin Treasury merger, Strive Enterprises will hold approximately 94.2% of the joint company, while Asset Entities shareholders retain the remaining 5.8%. Funding for BTC purchases will come through a mix of equity and debt offerings, targeting up to $1 billion in capital, which is quite ambitious by any standard in the crypto world.

Market Response and Outlook

Bitcoin responded quite positively to the Bitcoin Treasury announcement, rising above $97,000 on Wednesday and actually reaching $98,829 at the time of writing. The merger represents a significant development in corporate Bitcoin Treasury approaches, and potentially sets a precedent for institutional adoption going forward.

The deal still awaits regulatory approval before being fully executed. Strive Asset Management brings significant credibility to the venture, having grown to manage $2 billion in assets since its founding in 2022 by Vivek Ramaswamy, who later pursued political ambitions. The company is now led by CEO Matt Cole following Ramaswamy’s departure.