Fold Holdings, Inc. just announced that it has entered a new $250 million equity purchase facility to buy more Bitcoin for its corporate treasury. This comes amid a growing trend of BTC buying wherein Michael Saylor’s Strategy is leading.
Under the terms of the facility, the company can choose, at its own discretion, whether or not to issue up to $250 million worth of newly issued common stock. This means Fold is not obligated to use the full amount, or any of it, unless it decides to do so.
However, Fold must first file a registration statement with the U.S. Securities and Exchange Commission (SEC). This statement needs to be reviewed and officially approved. Only then can any shares be sold, and any funds be drawn.
The shares will be offered through a private placement, relying on legal exemptions under the Securities Act of 1933, which allow certain types of stock sales to occur without going through the full public offering process.
In addition, the deal will be handled by Cohen & Company Capital Market, a division of J.V.B Financial Group. It will act as the placement agent for the sale.
Fold already has more than 1490 Bitcoin in its treasury. This deal will allow it to increase that number. The company is valued at approximately $218 million in market capitalization, according to InvestingPro.
However, its stock (FLD) has declined over 57% over the past 6 months, according to Investing.com. It also reported a negative EBITDA of -$13.6 million over the last 12 months. Still, the company has been able to maintain a solid liquidy position with a current ratio of 2.2.
Fold describes itself as a pioneer in bringing Bitcoin into everyday financial experiences. Its suite of products includes the Fold App, Fold Credit Card, Fold Bitcoin Gift Card, and Fold Card, all designed to help users earn, spend, and save Bitcoin in daily life. The company also offers a rewards program that allows consumers to earn BTC on everyday purchases.
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