Author: Weilin, PANews
Fold is a company focused on Bitcoin financial services. On October 8, this 10-year-old crypto company submitted an S-4 application to the U.S. Securities and Exchange Commission (SEC) to prepare for a NASDAQ listing through a Special Purpose Acquisition Company (SPAC).
Fold allows users to earn Bitcoin cashback on everyday shopping at retailers like Amazon, Uber, and Starbucks. It also offers a debit card that allows users to buy or sell Bitcoin directly through their accounts, send Bitcoin, and earn cryptocurrency cashback rewards in the process. Fold integrates with the Bitcoin Lightning Network, enabling users to earn Bitcoin by paying mortgages and rent.
Based on this product positioning, Fold is also one of the competitors of digital payment giant Block's Cash App. Fold stated that it will continue to accumulate Bitcoin in the short term as part of its Bitcoin treasury investment strategy. As of July 31, the company reported holding approximately 1,002 BTC (valued at $63.2 million) in its investment treasury.
Valued at $365 million, with only 22 employees
On October 8, Fold submitted the S-4 document to the U.S. SEC, following the company's announcement in July of a plan to go public through an agreement with the SPAC FTAC Emerald Acquisition Corp. for a NASDAQ listing. The proposed transaction values Fold at $365 million. According to the document, FLD will become the company's NASDAQ stock code.
The annual operating performance as of December 31, 2023, shows that Fold's net income was $21,534,032, a decrease of about 25% compared to $28,877,975 in 2022. The unaudited operating performance as of June 30, 2024, shows that Fold's net income for the first six months was $10,069,835, a decrease of about 7% compared to $10,830,436 in the same period of 2023.
Currently, Fold's initial public offering (IPO) application is awaiting a response from the SEC. Fold's CEO Will Reeves emphasized that the IPO will provide much-needed funding to expand services and improve technological infrastructure. Fold plans to raise funds through the listing to enhance user experience, develop new products, and expand market coverage.
Having been established for 10 years, Fold had only 22 full-time employees as of March. Its growth has gone through three phases. Initially, Fold was a platform that helped users exchange unwanted gift cards for Bitcoin. Subsequently, the company began allowing users to purchase gift cards with Bitcoin, facilitating transactions in everyday spending locations like Starbucks and supermarkets. In the second phase, Reeves and co-founder Matt Luongo shifted direction, allowing users to buy gift cards with fiat currency while earning Bitcoin rewards in the process.
"We evolved because we saw a bigger problem: there aren't enough people who own Bitcoin, and there aren't enough good ways to earn Bitcoin," Reeves explained in a recent interview. "That's why we are very focused on rewards—giving everyone a way to passively earn Bitcoin without taking on too much risk or requiring too much educational cost."
Fold's rewards model has attracted many users who wish to acquire Bitcoin in a non-direct investment manner. Reeves emphasized the importance of timing, stating that the company has been very successful in seizing product opportunities. By offering products that provide Bitcoin rewards, Fold allows users to accumulate sats passively, rather than relying on traditional cash back, creating an initial experience of Bitcoin for users.
As Fold identifies its core user group and optimizes the sats return experience, the company has expanded its product range, adding other Bitcoin services such as buying and selling Bitcoin within the app and paying bills, allowing users to earn sats back simultaneously. In the future, Fold plans to launch credit cards and more financial services.
"Listing whale" may increase staff and launch international services
If successful in its listing, Fold will join the ranks of listed whales holding Bitcoin on their balance sheets. The most notable is MicroStrategy, which, as of September, holds 252,220 Bitcoins, valued at approximately $15 billion at today's prices. Recently, MicroStrategy CEO Michael Saylor updated the company's plan to offer $700 million in convertible preferred notes. Additionally, Block holds 8,211 Bitcoins, valued at over $630 million.
This year, optimism surrounding spot Bitcoin ETFs, Bitcoin halving, and various drivers related to the U.S. presidential election have led the market to generally predict that these factors will drive Bitcoin prices higher in the coming time of 2024. Some crypto users believe Bitcoin will approach the $100,000 mark. This optimism has also boosted the stock prices of companies holding Bitcoin. For example, Bitcoin has risen about 49% year-to-date, while MicroStrategy's stock has increased nearly 165% during the same period.
Fold CEO Will Reeves hopes to make Fold the Bitcoin bank for users. Although this idea may seem somewhat counterintuitive to some hardcore Bitcoin supporters who believe Bitcoin is meant to replace banks, Reeves sees it as more pragmatic. He believes Fold will become a bridge connecting the Bitcoin world with traditional banking and the new world of Bitcoin Layer 2.
Currently, Fold utilizes the Lightning Network, aimed at providing faster and cheaper payment services for users who use Bitcoin as peer-to-peer cash. Reeves stated that Fold also has applications for technologies like Liquid, roll-ups, BitVM, and Ark.
As of July 2024, the Fold platform has over 575,000 customer accounts that have earned Bitcoin rewards. Among these, over 65,000 are verified accounts and/or Bitcoin trading customers. Of these accounts and/or Bitcoin trading customers, approximately 10,000 are advanced users.
Currently, Fold only serves U.S. residents. Reeves revealed that Fold is about to launch more international products, although these products may not appear under the Fold brand.
At present, Fold's IPO plan positions it as a potential bridge connecting traditional finance with the cryptocurrency world, attracting more users to join this rapidly evolving field. With the market's continued focus on Bitcoin, Fold's successful listing may inspire more fintech companies to explore further possibilities in digital currencies, and PANews will closely monitor the subsequent developments.
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