Latest news with #digitalAssets
Forbes
3 days ago
- Business
- Forbes
Crypto Goes Corporate As A New Wave Of Public Companies Buy Bitcoin
So called crypto treasury companies, public firms that focus on acquiring digital assets like bitcoin, have become one of the most talked-about trends of 2025, and for good reason. These firms are raising money, merging with public shells and buying up tokens at breakneck speed turning themselves into vehicles for institutional and retail investors to gain exposure to digital assets without the hassle of operating in the murky netherworld of hackable crypto exchanges and digital wallets. The bitcoin treasury strategy pioneered by billionaire Michael Saylor's MicroStrategy, which now calls itself Strategy, remains dominant: more than 70 public companies around the world currently hold over $67 billion worth of the asset. But the sheer velocity of capital deployment for crypto treasuries at large is jaw-dropping. Since April, more than 30 public companies have announced plans to adopt similar strategies, targeting about $19 billion in capital raises, according to Elliot Chun of Architect Partners, a Palo Alto-based financial advisory firm. Just last week, the president's Trump Media and Technology Group, which operates the Truth Social social-media platform, announced it had secured $2.3 billion through a sale of its equity and convertible notes, marking one of the largest bitcoin treasury deals to date. And on Monday, billionaire Justin Sun, a major backer of the Trump family's crypto ventures, revealed that his digital asset platform, Tron, will go public in the U.S. via a reverse merger with Nasdaq-listed SRM Entertainment. As part of the deal, Tron will inject up to $210 million worth of its namesake token into the new company. The stocks of many of these unproven companies are soaring. Janover, a commercial property financing platform, has surged more than 5,300% since April, when it adopted a solana-focused strategy and rebranded as DeFi Development Corporation. Japan's hotel chain-turned-hodler MetaPlanet is up 472% year-to-date. Strategy, Michael Saylor's bitcoin-brimming firm, whose stock has gained 30% year-to-date, has soared 3,000% over the past five years. Most of these crypto Johnny-come-latelies are simply capitalizing on the investor hype and enthusiasm around crypto, now that the U.S. government appears to be in full embrace of the industry. Leverage is another driver of these stocks. Nearly all of these firms are adding crypto to their balance sheets after issuing convertible debt or equity similarly to the funding employed by Strategy. Leverage amplifies returns, so when bitcoin and other crypto prices are rising these stocks can produce bigger gains. Another factor is volatility, which hedge funds and options traders crave. These publicly-traded entities, stuffed with leveraged crypto, tend to gyrate wildly with the underlying asset and thus have high implied volatility. They are a speculative trader's dream. 'There are now a variety of investors that want to access [crypto] risk in a regulated fashion that fits within their investment mandate, and what these treasury companies are permitting is essentially creating lots of different vehicles to do that,' says Jeff Park, head of alpha strategies at crypto asset manager Bitwise. But it's not just leverage and volatility that set these companies apart. Operating in public markets, rather than the murky world of crypto trading, has allowed them to scale rapidly. By listing on major exchanges, they gain access to deep institutional capital markets, allowing them to raise billions almost overnight and place outsized bets that private firms simply can't match. The ability to borrow cheaply and easily is a big part of the new wave of crypto treasury firms' allure, notes Park. Since traditional IPOs are costly, often require teams of lawyers and can take years, these Strategy-wannabes are instead tapping Special Purpose Acquisition Companies, known as SPACs, or finding existing public shells—micro-cap companies ripe for what is known as a reverse-merger. Take Twenty One Capital, backed by Tether and SoftBank, which is merging with the blank check affiliate of the Lutnick family's Cantor Fitzgerald at a $3.6 billion enterprise value. Less than two months ago the SPAC, Cantor Equity Partners, traded for $10.80. Today it trades at $35 despite the fact that the merger has not yet been completed. Or consider former presidential candidate Vivek Ramaswamy's Strive Asset Management, which in May announced a reverse merger with Asset Entities, an $86 million provider of content delivery solutions that had otherwise been languishing, to buy bitcoin. Since the announcement, Asset Entities' stock went from around $0.60 to as high as $13, and now trades for $5.42. "The price action that is currently being seen is before these transactions have been consummated, and that is a little bit unnerving,' adds Park who believes the good times will continue for these corporate early adopters. 'If you believe there's a wall of money coming to buy bitcoin and everyone's waiting on the sidelines to get their deals approved, well you better hope that you can do it first,' he says. Park believes that much of the excitement around these new corporate crypto treasuries stems from anticipated returns: 'What we haven't seen yet is an aggressive exploration of the left side of the balance sheet, which is actually generating worthwhile yield and return through the bitcoin that is being held in these operating companies.' Additionally, the crypto these companies are buying is effectively being taken off the market. This creates scarcity, which can magnify price swings and accelerate tokens' rise, potentially making these treasury strategies even more impactful from a return standpoint. Architect Partners' Chun is wary of the rapid balance sheet build up among the new digital asset buyers. 'This is financial engineering at its best,' he warns. 'Straight equity, PIPEs, convertible notes, ATMs—it's an MBA course on its own in every different structure for public equity one can think of.' Video game retailer GameStop is using more than $3 billion in convertible debt to finance its new bitcoin buying strategy. How will Game Stop, which has already spent $500 million on bitcoin, generate a return on its new treasury asset? No details are available yet, but as long as its stock gets carried higher with the prices of crypto, it may not matter to management of the one-time meme stock favorite. 'You have a whole lot of hype. You have a lot of people who aren't crypto-native, who are new to this and don't understand the intricacies of operating with this asset class,' says Chun. 'Being in crypto this long, you're always looking for the next thing that will take us down to our next winter. This definitely has the makings of something like that.'
Yahoo
3 days ago
- Business
- Yahoo
Here Are the 2 Best Cryptocurrencies to Invest $5,000 in Right Now
Bitcoin and XRP are both worth owning. Bitcoin is seeing its supply dry up due to big new holders and buyers. XRP could soon be held by the government, and it's being used to process payments. 10 stocks we like better than Bitcoin › Crypto is an asset class that's brushing up against sovereign policy, institutional capital, and regulated finance infrastructure. That makes now an exciting time to invest and probably a profitable time, too. Two assets, in particular, stand to benefit from this confluence. One is Bitcoin (CRYPTO: BTC), and the other is XRP (CRYPTO: XRP). Both are already being treated as strategic assets by deep-pocketed actors, and both may soon sit at the core of how digital value is stored, transferred, and governed. Here's why they're worth an allocation of $5,000 each. Bitcoin is currently experiencing something it probably won't ever experience again: A confluence of political breakthroughs and institutional adoption. On March 6, the White House issueed an executive order creating a Strategic Bitcoin Reserve (SBR), instructing the executive agencies to hang on to their seized coins instead of auctioning them off as had been their previous course of action. While the SBR isn't up and running yet, it could be a huge development for holders. This single stroke removes hundreds of millions of dollars in float (coins available for public trading) from the market and signals that the government now treats Bitcoin as a strategic asset to be held rather than as contraband to be offloaded to anyone willing to take it. And investors have taken notice of the government's unambiguous stamp of approval for the asset. U.S. spot price Bitcoin exchange-traded funds (ETFs) attracted a net of roughly $5.8 billion in inflows during May alone. Those flows matter because they represent long-horizon buyers like pension plans, insurers, and sovereign funds, which are less likely to flip on every price wobble. Furthermore, the sheer scale of their purchasing activity indicates that this asset is far, far more than a meme coin. With its price at about $105,000, or just a bit less than its all-time high, the coin's lofty valuation is underpinned by the fact that a shrinking portion of the total supply is actually available to buy. Between the U.S.'s and other government stockpiles, ETF custodians, and a base of long-term holders that are largely holding their coins at a profit, the circulating float is thinner than it looks. This means that marginal purchasing activity will have a strongly positive impact on prices. Given these dynamics and the fact that it's never going to be easier to mine (produce) than it is right now, it's very reasonable to allocate $5,000 to Bitcoin today. Just be prepared for some volatility over the years, and years that you should aim to hold it. Bitcoin has dropped 50% or more six times in 12 years. It remains volatile. If you can't tolerate large declines without losing sleep, lower your allocation or avoid the asset entirely. While Bitcoin grabs headlines, XRP is engineering the plumbing of cross-border finance, and it's precisely that less-visible work that's driving demand -- not to mention getting a green light from the government that's similar to the one Bitcoin got. The same executive order that created the SBR also envisioned a separate basket of non-Bitcoin cryptocurrencies for the closely related repository, the National Digital Asset Stockpile (DAS), with officials later naming XRP as one of the leading candidates for inclusion. So, in the eyes of the government, the coin is worth stockpiling, too. Aside from its favorable treatment by the government, XRP's value proposition is functional. Banks use it as a bridge asset to send funds across international borders in seconds for fractions of a cent. When financial institutions use XRP to process their transfers instead of legacy technologies, they avoid currency exchange fees, as well as the fees and days-long delays that are traditionally associated with legacy money transfer methods like SWIFT. Ripple, the company that issues XRP, claims that more than $1 trillion in value has been moved using XRP's ledger since 2012. Its payment network now spans 90 markets and 55 different currencies, so all of the most-used currencies in all of the most-moneyed nations are supported. The ability of XRP to handle such throughput is likely part of the reason why 83% of institutional investors plan to boost crypto exposure this year, many targeting tokens with clear real-world utility. XRP's market cap is about $129 billion, so any incremental institutional demand can move the needle very quickly in comparison to a behemoth like Bitcoin. But, its volatility is not to be underestimated. XRP once fell 95% peak-to-trough. Utility doesn't guarantee price support, especially if private ledgers win out or Ripple stumbles. Still, for investors allocating $5,000, XRP is a rational way to gain asymmetric exposure to real-world crypto adoption. Its institutional use case, regulatory tailwinds, and rising integration into national policy initiatives make it a somewhat risky but likely favorable bet. Before you buy stock in Bitcoin, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Bitcoin wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $660,821!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $886,880!* Now, it's worth noting Stock Advisor's total average return is 791% — a market-crushing outperformance compared to 174% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 9, 2025 Alex Carchidi has positions in Bitcoin. The Motley Fool has positions in and recommends Bitcoin and XRP. The Motley Fool has a disclosure policy. Here Are the 2 Best Cryptocurrencies to Invest $5,000 in Right Now was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Reuters
4 days ago
- Business
- Reuters
The return of stolen crypto can be a taxing event
June 17, 2025 - Digital assets have been subject to some of the largest thefts in history. In fact, the largest crypto theft — in connection with the February 2025 $1.5 billion Bybit hack — dwarfs the Guinness Book of World Records' entry for the largest bank robbery of $282 million. See "Crypto's biggest hacks and heists after $1.5 billion theft from Bybit," Reuters, Feb. 24, 2025. Sometimes, however, all is not lost and at least some portion may be recovered and available for restitution or return to victims. While any recovery may be cause for celebration, unforeseen or unintended tax consequences can put a damper on the festivities. The tax due on the recovery of stolen crypto can depend upon several factors, including any deductions taken in connection with the initial theft, the type of property returned and intervening changes to its value, and other taxpayer circumstances. Yesterday's hacks; tomorrow's recoveries (and taxes) In the past five years, an estimated $189 billion in total cryptocurrency value was reportedly transferred to illicit addresses, and there are undoubtedly more thefts to come. See "2025 Crypto Crime Trends: Illicit Volumes Portend Record Year as On-Chain Crime Becomes Increasingly Diverse and Professionalized," Jan. 15, 2025. Over 300 hacking incidents were reported in 2024 alone. See id., "$2.2 Billion Stolen from Crypto Platforms in 2024, but Hacked Volumes Stagnate Toward Year-End as DPRK Slows Activity Post-July," Dec. 19, 2024. And during the first quarter of 2025, over $1.63 billion in crypto was lost to hacks. See "Crypto crooks targeted $244M in May, hack losses down 40% — PeckShield," CoinTelegraph, June 1, 2025. When cryptocurrency is stolen, recovery rates vary significantly on a case-by-case basis, but the silver lining is an industry average recovery rate of approximately 70%. See "Most Legitimate Crypto Recovery Service in 2025," TheChain, June 6, 2025. Crypto investors may have several paths to recover their stolen crypto. For example, where the government has recovered stolen crypto, investors have been provided the opportunity to seek restitution as a victim under the Crime Victims' Rights Act or recover their stolen assets through proceedings ancillary to the criminal forfeiture proceedings. Whether an investor receives the actual assets that were taken, substitute property, or their cash liquidation value (or anything at all), may depend upon such factors as whether the assets were laundered, ownership of the assets, and the crimes for which the hackers are charged. Although such factors are mostly outside the control of the investor, the form of distribution has a significant impact on the taxes owed. As discussed below, understanding the potential form of recovery should inform an investor's tax position at the time of the loss (and whether they should take a deduction at all in the year that the assets are stolen). You may or may not want to claim a crypto theft tax loss In most cases, when investment property such as cryptocurrency is stolen, the owner of that cryptocurrency can claim an ordinary (as opposed to capital) deduction for the loss. This deduction is equal to the taxpayer's adjusted basis in the property. For cryptocurrency, the adjusted basis is generally the amount paid for it, or if the cryptocurrency was directly mined or won by the taxpayer, the value included in the taxpayer's income tax return when the taxpayer received the cryptocurrency. For example, say an individual bought five Bitcoin in 2020 for $10,000 each, the taxpayer would have a total basis in those five Bitcoin of $50,000. If the Bitcoin were stolen in 2022, when the value of a single Bitcoin equaled $40,000, the taxpayer would only be entitled to deduct the basis in the stolen Bitcoin, or $50,000 (even though the total value is $200,000). This $50,000 deduction would be available to offset income taxes the taxpayer would otherwise owe. However, the value of the theft deduction can potentially be very small in comparison to the potential value the investor may eventually recover, which is especially the case for early-stage crypto investors. Take the previous example: assume the taxpayer claimed a $50,000 taxable deduction in 2022. If the Bitcoin were returned to the taxpayer in 2025 (when Bitcoin is valued at around $100,000), the taxpayer would owe taxes on $500,000 of ordinary income (regardless of whether the taxpayer sells the Bitcoin in 2025). This is because once a loss for theft is claimed on property for tax purposes, any subsequent recovery of that property is treated as a taxable gain. And, the amount of such gain is added to the basis of that property to offset future gains upon disposition. On the other hand, if the taxpayer did not claim a loss in 2022, he or she could have potentially avoided any tax in 2025 when the cryptocurrency was returned. The form of recovery matters (even if a deduction was not taken at the time of theft) If cryptocurrency is returned to its rightful owner in its original form, and the owner didn't previously take a theft deduction for that cryptocurrency, then the return is a non-taxable event. If, however, the cryptocurrency is returned to the owner in the form of its cash value (and the owner did not take a previous theft deduction), this recovery still may result in taxable income to the owner. Using our previous example, assume the investor bought five Bitcoin in 2020 at a price of $10,000 each, the Bitcoin were stolen in 2022, and the government sends the taxpayer $500,000 in 2025 as recovery for the five stolen Bitcoin. Here, the investor would have taxable income on the cash received ($500,000) minus the taxpayer's basis in the cryptocurrency ($50,000), meaning the investor would have to pay taxes on $450,000 of capital gains in 2025. This sudden tax bill from recovered cash can be disadvantageous for multiple reasons. First, most obviously, the tax could easily eat away a substantial portion of the cash recovery received. Second, even if the investor wanted to realize cash from their cryptocurrency, doing so all at once may result in a higher tax bill than if the investor sold the cryptocurrency over a matter of years. In other words, the investor could have potentially reduced his or her total tax bill by spreading out their taxable income from recovered cryptocurrency by selling it in different years. Third, individuals generally pay state income taxes on realized gains from cryptocurrency based on their state of residence when the gain is realized. If an individual lives in a high-tax state at the time they recover previously stolen cryptocurrency, the taxpayer may have an opportunity to move to a lower-tax state before ultimately selling the cryptocurrency and realizing gain from it. If the recovery is in the form of cash, however, the owner will recognize all the gain in their current state of residence. Conclusion Crypto thefts are bound to increase in the future with the expansion of Decentralized Finance (DeFi) and the increasing sophistication and technology of hackers, especially if Bitcoin and other digital assets continue their growth trajectory. Before taking any tax position at the time of loss, investors should consider their potential right to participate in distributions if assets are recovered in the future and the tax implications under possible scenarios. Though much of the process for recovery and participation in recovered assets is beyond investors' control, tax liability resulting from the recovery of assets may be anticipated and possibly deferred or reduced with advanced planning and analysis. Joseph Cioffi is a regular contributing columnist on consumer and commercial financing for Reuters Legal News and Westlaw Today.
Globe and Mail
7 days ago
- Business
- Globe and Mail
Will GameStop's Bitcoin Swing Be a Home Run or an Epic Fail?
Video game retailer GameStop 's (NYSE: GME) business has been struggling for years, as more of the gaming market continues to shift to digital downloads. However, the stock was the subject of massive investor attention during the meme stock frenzy of 2020 and 2021, with a renewed spike in interest last year -- during which the company raised quite a bit of capital. These days, GameStop has roughly $6.4 billion in cash and equivalents on its balance sheet, a lot considering its $10 billion market cap. And more recently, GameStop is gradually diversifying its business, including its newest strategy of investing substantial sums of money in Bitcoin (CRYPTO: BTC). GameStop's Bitcoin bet There are a couple of different components of GameStop's Bitcoin investment that are important for investors to know. First, investors learned on May 28 through a company press release that GameStop had purchased 4,710 Bitcoins, which means that the company invested approximately $500 million in the digital asset. More recently, GameStop announced plans to buy even more Bitcoin, and that it would complete a $1.75 billion convertible note offering to do it. The short version is that a convertible note is a type of debt security, and the holders have the option to convert the debt into common stock at a certain price. The company then decided to up its offering to $2.25 billion. The convertible notes, which mature in June 2032 unless converted or redeemed, will have an initial conversion price of $28.91 per share. With GameStop stock trading for about $22.50 as I'm writing this, that means that the stock would need to rise about 28% for conversion to become worthwhile. Notably, the convertible notes don't pay interest -- so for the time being, GameStop isn't adding any ongoing interest expense. Why is GameStop buying Bitcoin? GameStop CEO Ryan Cohen said that the company is investing heavily in Bitcoin to protect against macroeconomic worries. After all, Bitcoin's fixed supply and non-governmental nature have historically made the digital currency appealing to many investors. This certainly isn't a unique philosophy. Strategy, formerly known as MicroStrategy, has been accumulating Bitcoin for several years -- and has used some convertible debt to do it. And it's tough to argue with management's decision. Since August 2020, when the company first started buying Bitcoin, Strategy's stock price is up by more than 2,900%. Truth Social parent company Trump Media & Technology Group has also announced a plan to buy billions in Bitcoin. Investors don't seem convinced Judging by the market's reaction to the news, it doesn't seem that investors are convinced that holding massive quantities of Bitcoin is the best strategy, especially when some of it will be purchased with debt. Looking at the chart below, we can see that there were two major drops in GameStop's stock price over the past month -- one after each Bitcoin-related news item was announced. Overall, GameStop is down by about 20% over the past month, with the larger of the two declines coming after the convertible debt plan was revealed. GME data by YCharts The bottom line To be sure, I have absolutely no clue what the price of Bitcoin will do over the next few months or years. If Bitcoin continues to appreciate in value, GameStop's move could look like a stroke of genius in a few years. But if it falls, it could end up being a poor capital allocation decision. Should you invest $1,000 in GameStop right now? Before you buy stock in GameStop, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and GameStop wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $655,255!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $888,780!* Now, it's worth noting Stock Advisor 's total average return is999% — a market-crushing outperformance compared to174%for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of June 9, 2025
Reuters
13-06-2025
- Business
- Reuters
SEC Regulation of Crypto and Digital Assets Under Trump 2.0 Practical Law The Journal
For the first time, crypto and digital assets played a meaningful role in a US election. The crypto community favored President Trump in the 2024 election because he promised crypto-friendly reforms throughout the campaign. As anticipated, the second Trump administration has acted swiftly and voluminously in addressing regulatory pain points for the crypto markets as part of a broader deregulatory initiative, as well as enacting other noteworthy pro-crypto measures. Because SEC commissioners serve at the discretion of the president, the agency's policies generally reflect the priorities of the current administration. Under Trump 2.0, the SEC has wasted no time in implementing the administration's game plan. This article highlights significant SEC crypto-related actions under the second Trump administration, including: Formation of the SEC crypto task force. Replacement of the SEC's crypto enforcement unit with the newly formed Cyber and Emerging Technologies Unit (CETU). Termination or delay of notable crypto enforcement matters. Rescission of Staff Accounting Bulletin 121 (SAB 121) on crypto custody accounting. Withdrawal of a 2019 statement and issuance of frequently asked questions (FAQs) on broker-dealer custody of digital assets. Withdrawal of an appeal of a district court ruling vacating expanded SEC definitions of the terms 'dealer' and 'government securities dealer' which captured crypto. Statements by the Division of Corporation Finance on: stablecoins; meme coins; and crypto mining activities. (For the complete version of this resource, which includes information on a variety of Trump administration crypto-related initiatives, including an executive order creating a presidential crypto working group and prudential bank crypto regulatory reforms, see Regulation of Crypto and Digital Assets Under Second Trump Administration: Overview on Practical Law.) Crypto Task Force On January 21, 2025, then-Acting SEC Chair Mark Uyeda announced the launch of an SEC crypto task force, headed by Commissioner Hester Peirce, dedicated to developing a comprehensive and clear regulatory framework for crypto assets in the US. The announcement marked a dramatic change in the SEC's approach to crypto regulation, which has in recent years relied on regulation by enforcement. The agency took a notoriously aggressive approach to crypto enforcement under prior SEC Chair Gary Gensler, placing the agency at odds with the crypto industry and certain proponents of fintech innovation (for more information, see Regulation of Crypto-Asset Securities in USA on Practical Law). These critics have often included Commissioners Uyeda and Peirce, who now find themselves in position to guide SEC crypto policy.
