This week, David Bailey, one of the leading personalities in the world cryptocurrency sector, announced his intentions of acquiring $762 million of Bitcoin in a unified effort. A portion of the larger plan to make his company among the most substantial institutional owners of the digital currency is the move, which he has termed a smash buy.
Assuming that it is indeed willing to buy the whole amount and that it carries it out at the current market prices of approximately 118,850 dollars per Bitcoin, it would acquire around 6400 BTC. According to industry analysts, this would make Nakamoto Inc. one of the leading institutional holders in the world alongside established cryptocurrency investments and publicly traded organisations with a big Bitcoin bank.
Who is David Bailey?
David Bailey is a veteran promoter of Bitcoin and co-founder of BTC Inc. parent company of Bitcoin Magazine. He has been closely affiliated with U.S. President Donald Trump, where he even served as a cryptocurrency advisor to the latter when Trump was running his political campaign. During the past few years, Bailey has not only identified himself as a leader in the business sector but also as a political activist who advocates Bitcoin adoption and friendly regulatory policies in the United States. Last month, he merged Nakamoto Inc., of which he is a head, with publicly listed KindlyMD on Nasdaq.
Executing the “Smash Buy”
Bailey reported that he had previously set the intention of spending $1 billion on a single day purchasing Bitcoin, but changed the amount to $762 million due regards funds available to be committed. The operation will be made based on a volume-weighted average price (VWAP) strategy. This is achieved by splitting the acquisition into many smaller trades to be executed over a period of days to reduce market influence and to ensure that gains and losses are not substantially diluted by price slippage.
Bailey commented on this in a statement, and said that is something he has dreamed about since his earliest days in Bitcoin. We are creating a Bitcoin juggernaut, and this is just the start.
Currently, the Bitcoin holdings of Nakamoto Inc. consist of fewer than two dozen coins. The acquisition would take it a huge step forward in its asset base and herald a move towards aggressive acquisitions. The company also obtained an equity financing of 51.5 million earlier in the year to finance its acquisition program, and further obtained additional commitments of more than 700 million since then.
A Broader Institutional Push
The news is amidst an even broader trend of institutional acceptance of Bitcoin. Over the last few months, a handful of publicly listed corporations have added cryptocurrency to reserves in part because it is an inflation hedge and because, in the long term, cryptocurrency can be a store of value. In aggregate, it is believed that public and private companies own over 1.2 million BTC, but this number has increased considerably as governments have bolstered their involvement.
By settling Nakamoto Inc. as one of the top holders, Bailey seems to be making an effort to influence the mood in the market and to influence the policy scene. He has also announced plans to raise between 100 million and 200 million dollars on a political action committee in the United States to lobby the pro-Bitcoin policies.
Market and Regulatory Implications
According to analysts, such a big purchase would affect the short-term prices of Bitcoin depending on the speed at which the buy orders fill the market. Nevertheless, with the use of VWAP, Nakamoto Inc. will tend to allocate the orders in such a way that can combat triggering sharp price movements.
Regulators may be more cautious about the political aspects of the activities of Mr. Bailey in his proposed role of extension of his corporate activities to those of advocacy, considering that the two roles coincide. Whether this move will lead to speeding up by other large investors of their accumulation programmes will be an issue on the radar of the market participants.
A successful bid would set one of the biggest corporate purchases of Bitcoin as a single transaction in history. As far as Mr. Bailey is concerned, it would be a very visible step in his project to transform Nakamoto Inc. into what he describes as a Bitcoin juggernaut – a company that would not only possess large reserves of the digital asset, but also promote its worldwide use.
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