Author: Weilin, PANews
Fold is a company focusing on Bitcoin financial services. On October 8, the 10-year-old crypto company submitted an S-4 application to the U.S. Securities and Exchange Commission (SEC), preparing to list on the Nasdaq through a special purpose acquisition company (SPAC).
Fold allows users to earn Bitcoin cashback on everyday purchases at retailers such as Amazon, Uber and Starbucks. It also offers a debit card that allows users to buy or sell Bitcoin directly through their account, as well as send Bitcoin, and provides cryptocurrency cashback rewards in the process. Fold is integrated with the Bitcoin Lightning Network, allowing users to earn Bitcoin by paying mortgages and rent.
Based on this product positioning, Fold is also one of the competitors of Cash App under digital payment giant Block. Fold said it will continue to accumulate Bitcoin in the short term as part of its Bitcoin treasury investment strategy. As of July 31, the company said it held approximately 1,002 BTC (worth $63.2 million) in its investment treasury.
Valuation: $365 million, only 22 employees
On October 8, Fold filed an S-4 filing with the U.S. SEC, a move that comes after the company announced in July that it plans to go public through an agreement with Nasdaq-listed special purpose acquisition company FTAC Emerald Acquisition Corp. The proposed transaction values Fold at $365 million. According to the filing, FLD will become the company's Nasdaq stock symbol.
The annual operating results as of December 31, 2023 showed that Fold's net income was $21.53 million, a decrease of approximately 25% from $28.88 million in 2022. The unaudited operating results as of June 30, 2024 showed that Fold's net income in the first six months was $10.07 million, a decrease of approximately 7% from $10.83 million 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 stressed that the IPO will provide much-needed funds for expanding services and improving technical infrastructure. Fold plans to raise funds through the listing to improve user experience, develop new products, and expand market coverage.
Fold, which has been established for 10 years, had only 22 formal employees as of March. Its growth has gone through three stages. Initially, Fold was a platform that helped users exchange unwanted gift cards for Bitcoin. Later, the company began to allow users to buy gift cards with Bitcoin, helping users to trade in daily consumption places such as Starbucks and supermarkets. After entering the second stage, Reeves and co-founder Matt Luongo changed direction and allowed users to buy gift cards with fiat currency and earn Bitcoin rewards in the process.
“We evolved because we saw that the bigger problem was that there weren’t enough people with Bitcoin and there weren’t enough good ways to earn Bitcoin,” Reeves explained in a recent interview. “That’s why we’re so focused on rewards — giving everyone a way to passively earn Bitcoin without a lot of risk and without a lot of educational cost.”
Fold's reward model has attracted many users who want to acquire Bitcoin without direct investment. Reeves emphasized the importance of timing and said that the company has been very successful in timing its products. By offering products with Bitcoin rewards, Fold allows users to accumulate sats in a passive way instead of relying on traditional cash back, creating a first-time Bitcoin experience for users.
As Fold identified its core user groups and optimized the sats return experience, the company expanded its product range and added other Bitcoin services, such as buying and selling Bitcoin and paying bills in the app, where users can get sats back at the same time. In the future, Fold plans to launch a credit card and more financial services.
"Listed whales" may recruit new staff and launch international services
If successfully listed, Fold will join the ranks of listed whales that hold Bitcoin on their balance sheets. The most notable of these is MicroStrategy, which held 252,220 Bitcoins as of September, worth about $15 billion at today's prices. Recently, MicroStrategy CEO Michael Saylor updated the company's plans to offer $700 million in convertible senior notes. In addition, Block also holds 8,211 Bitcoins, worth more than $630 million.
This year, optimism about spot Bitcoin ETFs, Bitcoin halving, and the many driving forces of the US presidential election have led to market predictions that these factors will drive Bitcoin prices to continue to rise in the rest of 2024, and some crypto users believe that Bitcoin will move towards 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 risen nearly 165% during the same period.
Fold CEO Will Reeves hopes that Fold will become a Bitcoin bank for users. Although this idea may seem a bit abnormal to some hardcore Bitcoin supporters who believe that Bitcoin is designed to replace banks, Reeves believes that it is more pragmatic. Reeves believes that Fold will become a bridge between Bitcoin and the traditional banking world and the new world of Bitcoin Layer 2.
Currently, the Lightning Network is available on Fold, which aims to provide faster and cheaper payment services for users who use Bitcoin as peer-to-peer cash. Reeves said that there are also application scenarios for technologies such as Liquid, roll-ups, BitVM, and Ark on Fold.
As of July 2024, there are more than 575,000 customer accounts on the Fold platform that have received Bitcoin rewards. Of these, more than 65,000 are verified accounts and/or Bitcoin trading customers. Of these accounts and/or Bitcoin trading customers, approximately 10,000 are premium users.
Currently, the Fold is only available to residents of the U.S. Reeves revealed that more international products are coming soon, although they may not appear under the Fold brand.
At present, Fold's IPO plan makes it likely to become a bridge between traditional finance and the world of cryptocurrency, attracting more users to join this rapidly developing field. As the market continues to pay attention to Bitcoin, Fold's successful listing may inspire more financial technology companies to explore more possibilities of digital currency. PANews will pay close attention to its subsequent trends.
