Shell Listing Boom: Why Do Bitcoin Treasury Companies Prefer SPAC?

Original author: Prathik Desai

Original compilation: Luffy, Foresight News

In 2020, Strategy (then known as MicroStrategy) began swapping debt and equity for Bitcoin. This company, originally selling enterprise software, transformed under the leadership of its co-founder and chairman Michael Saylor, channeling corporate funds into Bitcoin and becoming the largest Bitcoin holder among listed companies.

Five years later, Strategy is still selling software, but the contribution of operations to the company's overall gross profit has been steadily declining. In 2024, operating gross profit decreased to about 15% compared to 2023; in the first quarter of 2025, this figure dropped by 10% year-on-year. By 2025, Strategy's model had been replicated, adapted, and simplified, paving the way for over a hundred listed entities to hold Bitcoin.

The model is simple: issue low-cost debt secured by the enterprise, buy Bitcoin, and after its appreciation, issue more debt to buy more Bitcoin—creating a self-reinforcing cycle that turns the corporate treasury into a leveraged cryptocurrency fund. Matured debt is repaid by issuing new shares, diluting existing shareholders' equity. But the appreciation of Bitcoin holdings drives up the stock price, offsetting the impact of equity dilution.

Most companies following Strategy's footsteps have existing businesses, hoping to benefit their balance sheets with Bitcoin as an appreciating asset.

Strategy was once entirely an enterprise analysis and business intelligence platform; Semler Scientific, the 15th largest listed Bitcoin holder, was purely a health tech company; GameStop, which recently joined the Bitcoin reserve club and attracted attention, was a well-known game and electronics retailer until it recently ventured into Bitcoin treasury building.

Now, a new wave of companies is eager to enjoy Bitcoin's benefits without the burden of building a physical business. They have no customers, no profit model, and no operational roadmap. All they need is a balance sheet filled with Bitcoin and a financial shortcut to quickly enter the public market. Hence, Special Purpose Acquisition Companies (SPACs, or shell companies) have emerged.

These Bitcoin asset SPACs, such as ReserveOne, ProCap (backed by Anthony Pompliano), Twenty One Capital (backed by Tether, Cantor Fitzgerald, and SoftBank), are offering simple packaging solutions. Their proposition is clear: raise hundreds of millions of dollars, buy Bitcoin in bulk, and give public market investors a stock ticker to track it all. That's it, that's the entire business.

These newcomers' approach is the opposite of Strategy's: accumulate Bitcoin first, then think about the business part. This model resembles a hedge fund more than a corporation.

Yet, many companies are still lining up to choose the SPAC path. Why?

A SPAC is a pre-funded shell company that raises money from investors (usually a group of private investors), lists on a stock exchange, and then merges with a private company. It's often described as a shortcut to an IPO. In the cryptocurrency space, it's a way for Bitcoin-heavy entities to go public quickly, lest market sentiment or regulatory shifts turn against them—speed is key.

Although this "speed advantage" is often illusory. SPACs promise to go public in 4-6 months, compared to 12-18 months for an IPO, but in reality, regulatory scrutiny for cryptocurrency companies takes longer. For example, Circle failed to go public via a SPAC and later succeeded through a traditional IPO.

But SPACs still have their advantages.

They allow these companies to paint bold visions, such as "$1 billion in Bitcoin holdings by year-end," without immediately undergoing the rigorous scrutiny of the traditional IPO process. They can introduce post-listing private investments (PIPE) from heavyweight firms like Jane Street or Galaxy, pre-negotiate valuations, package themselves as SEC-compliant shell companies, and avoid being labeled as "investment funds."

The SPAC route simply makes it easier for companies to sell their strategy to stakeholders and investors, because there's nothing else to sell besides Bitcoin.

Remember when Meta and Microsoft considered adding Bitcoin to their treasuries? They faced overwhelming opposition.

For public investors, SPACs seem to offer pure Bitcoin exposure without direct contact with cryptocurrencies, much like buying a gold ETF.

But SPACs also face acceptance issues among retail investors, who prefer gaining Bitcoin exposure through more popular channels like exchange-traded funds (ETFs). The 2025 Institutional Investor Digital Asset Survey shows that 60% of investors prefer exposure to cryptocurrencies through registered investment vehicles like ETFs.

Nevertheless, demand exists. Because this model contains leverage potential.

Strategy didn't stop after buying Bitcoin; it continuously issued convertible notes (likely to be redeemed by issuing new shares). This approach helped the former business intelligence platform become a Bitcoin "turbocharger": during Bitcoin's rise, its stock price increased more than Bitcoin itself. This blueprint remains in investors' minds: a SPAC-based Bitcoin company could replicate this acceleration model—buy Bitcoin, issue more shares or debt to buy more Bitcoin, and repeat.

When a new Bitcoin company announces a $1 billion institutional PIPE investment, it inherently conveys credibility, signaling to the market that big money is paying attention. Consider how much credibility Twenty One Capital gained from backing by heavyweights like Cantor Fitzgerald, Tether, and SoftBank.

SPACs enable founders to achieve this early in the company's lifecycle without first building a revenue-generating product. This early institutional recognition helps gain attention, capital, and momentum, while reducing the resistance faced by already listed companies from investors.

For many founders, the appeal of the SPAC path lies in flexibility. Unlike IPOs, which have strict timing and pricing for disclosures, SPACs offer more control over narratives, forecasts, and valuation negotiations. Founders can tell forward-looking stories, plan capital, retain equity, and avoid the endless fundraising cycles of the traditional "VC→IPO" path.

The packaging itself is attractive. Public stock issuance is a well-known language: stock tickers can be traded by hedge funds, added to retail platforms, and tracked by ETFs. It's a bridge connecting crypto-native ideas with traditional market infrastructure. For many investors, this packaging is more important than the underlying mechanism: if it looks like a stock and trades like a stock, it can fit into existing portfolios.

If SPACs can be established and listed without any existing business, how will they operate? Where will the revenue come from?

SPACs also allow for structural creativity. A company can raise $500 million, invest $300 million in Bitcoin, and use the rest to explore revenue strategies, launch financial products, or acquire other income-generating crypto businesses. This hybrid model is hard to achieve with ETFs or other models, which have stricter rules and more rigid mandates.

Twenty One Capital is exploring structured fund management. Its Bitcoin reserves exceed 30,000, with part allocated to low-risk on-chain yield strategies. The company merged with a SPAC backed by Cantor Fitzgerald and raised over $585 million through PIPE and convertible bond financing to buy more Bitcoin. Its roadmap includes building Bitcoin-native lending models, capital market tools, and even producing Bitcoin-related media content and campaigns.

Nakamoto Holdings, founded by David Bailey of Bitcoin Magazine, took a different path to similar goals. It merged with KindlyMD, a listed healthcare company, to build a Bitcoin treasury strategy. The deal secured $510 million in PIPE and $200 million in convertible note financing, becoming one of the largest crypto-related fundraisings. It aims to securitize Bitcoin exposure into stocks, bonds, and hybrid instruments tradable on major exchanges.

Pompliano's ProCap Financial plans to offer financial services on top of its Bitcoin treasury, including crypto lending, staking infrastructure, and products for institutional Bitcoin yield access.

ReserveOne takes a more diversified approach. While Bitcoin remains core to its portfolio, it plans to hold a basket of assets like Ethereum and Solana, using them for institutional-grade staking, derivatives, and over-the-counter lending.

Backed by firms like Galaxy and Kraken, ReserveOne positions itself as a crypto-native BlackRock, combining passive exposure with active yield generation. Theoretically, its revenue comes from lending fees, staking rewards, and managing spreads between short- and long-term cryptocurrency asset bets.

Even if entities find sustainable revenue methods, the "listed company" label brings paperwork and challenges.

Post-merger operations highlight the need for sustainable revenue models. Fund management, custody, compliance, and audits become critical, especially when the only product is a highly volatile asset. Unlike ETF issuers, many SPAC-backed companies start from scratch, may outsource custody, have weak controls, and risks accumulate silently.

Additionally, there are governance issues. Many SPAC sponsors retain special rights, like enhanced voting, board seats, and liquidity windows, but often lack crypto expertise. When Bitcoin prices crash or regulations tighten, experts are needed at the helm. No one notices during market rises; problems surface during falls.

So, how should retail investors respond?

Some will be attracted by the upside, imagining a small bet on a Bitcoin SPAC could replicate Strategy's boom. But they also face multiple risks: equity dilution, volatility, redemptions, and untested management teams. Others may prefer the simplicity of spot Bitcoin ETFs or even holding Bitcoin directly.

Because when you buy Bitcoin stocks listed via SPACs, you're not directly holding Bitcoin; you're buying someone else's plan to buy Bitcoin for you, hoping they succeed. This hope comes at a cost, and in a bull market, the cost seems worth it.

Yet, you still need to understand what you're actually buying and how much.

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