Trump Crypto Mentor Places $653 Million Bitcoin Bet, Why Isn't Wall Street Buying It?
Original Title: Trump's Crypto Adviser's Quixotic Quest To Build A Leading Bitcoin Bank
Original Author: Nina Bambysheva, Forbes
Original Translation: Luffy, Foresight News
In the words of David Bailey, the past six months could be described as a "Saving Private Ryan-style brutal battle." The 35-year-old CEO of Nakamoto Holdings—his digital treasury company created to manage corporate Bitcoin reserves—has witnessed his boldest move yet: a merger with KindlyMD, a small publicly traded healthcare company in Utah, turning from initial success to the current ordeal.
"I've been getting beaten up in the stock market," he said. The company's stock price has plummeted from $25 to 92 cents in six months.
Bailey is not your typical Nasdaq-listed company executive. His more widely known identity is the CEO of "Bitcoin Magazine," the organizer of the world's largest Bitcoin conference, and also a key figure in Donald Trump's shift in attitude towards cryptocurrency. "Our goal," he said, "is to become the world's number one Bitcoin company."
In May of this year, KindlyMD of Utah—a publicly traded healthcare clinic operator with $2.7 million in annual revenue offering traditional and alternative therapies—announced a reverse merger with Bailey's Nakamoto Holdings, aiming to transform into a Bitcoin holding company. The merged company is listed on Nasdaq with the ticker symbol NAKA and currently holds approximately $653 million worth of Bitcoin.
Wall Street is skeptical of Bailey's plan. After reaching a peak of nearly $35 in May, the company's stock price has spent most of October below $1, trading at a discount of 98% from the net asset value corresponding to its 5,765 Bitcoins on the balance sheet.
It turns out Nakamoto Holdings is a victim of its own financing strategy. To raise funds to purchase cryptocurrency, the company conducted a series of private investment in public equity (PIPE) transactions totaling around $563 million. These transactions issued billions of new shares to private investors at a substantial discount, significantly diluting existing shareholders' equity. In September, a large number of PIPE shares were unlocked for trading, and investors rushed to cash in on profits, triggering a stock price collapse. Bailey's letter to shareholders urging short-term speculators to exit the stock only added fuel to the fire.
“For us, those investors who only come for trading are actually a very high-cost source of funds,” Bailey said. “I know some people don't agree with this view, but what we need is long-term partners with aligned interests. This is a high-stakes gamble for us.”
In fact, Bailey indicated that he will soon merge his other businesses — including Bitcoin Magazine, the parent company of the Bitcoin conference and consultancy BTC Inc., as well as his holdings in the hedge fund 210k Capital and the venture capital firm 2140 — into KindlyMD. Forbes estimates that these entities could add up to $200 million in value to this Bitcoin treasury company while increasing Bailey's stake (currently at 3%).
Bailey did not comment on Forbes' data but mentioned that the cash flow from these profitable businesses will help KindlyMD acquire more Bitcoin. According to sources, the assets under management of 210k Capital alone quietly surged from about $100 million in January of this year to $400 million, achieving a quadruple increase.
This rising star in finance has a simple rationale: Michael Saylor holds over 600,000 bitcoins and has little to no need for operational businesses. Other players must have a differentiated strategy to prove their value.
“We need to do things that create value,” Bailey said. “Operating entity businesses are one way to do that.”
Although KindlyMD is headquartered in Salt Lake City, Utah, Bailey primarily works from his home in Guaynabo, Puerto Rico. During video calls, he is often seen in front of a large painting depicting a bank being engulfed in flames. This piece is by the crypto artist Cypherpunk Now and is one of Bailey's hundreds of collectibles, titled “Burning Bank.”
“Every time I have a meeting with a banker, I make sure this painting is in the background,” he said with a smile. For someone aiming to build his own bank, the scene couldn't be more fitting.
Bailey grew up on a farm in Fayetteville, Tennessee, about an hour's drive south of Nashville. He had a strong interest in money and markets from a young age. In 2009, he entered the University of Alabama to study economics, finance, and mathematics, with aspirations of becoming an investment banker.
“I used to be a huge fan of Warren Buffett, and in college, I would attend every Berkshire Hathaway shareholder meeting. I never imagined I would buy Bitcoin; it was so unlike the person I was back then,” he recalled.
In 2012, a friend sent him an article about Bitcoin, and everything began to change. Initially skeptical, Bailey couldn't disprove Bitcoin's concept. In the same year, in November, when Bitcoin's price was fluctuating between $10 and $12, he made his first investment.
In 2014, a year after graduating, Bailey joined Bitcoin Magazine, an early publication focused on the emerging cryptocurrency, co-founded by Vitalik Buterin, who later created Ethereum. Shortly after, Bailey and his college friend Taylor Evans acquired the magazine through their jointly founded BTC Inc.
To expand their brand's influence, the two launched the Bitcoin Conference in 2019. This festival-like event has now become the "Coachella of Crypto" and has made Bailey one of the most influential Bitcoin evangelists. The conference held in Nashville last year attracted 35,000 believers, investors, and politicians, with then-presidential candidate Donald Trump in attendance.
Bailey revealed that his interaction with Trump began during a conversation in Puerto Rico in 2024 on how to get the president interested in Bitcoin. "Paul Manafort was the initial gatekeeper who helped us get into his circle," he said. Soon, Bailey's team was granted a presentation at Trump Tower. The core message was simple: Bitcoin voters would play a crucial role in the presidential election. Trump, known for making deals, agreed to meet, believing that if Bailey and his friends could bring votes and enthusiastic support, the cryptocurrency industry would have a voice.
"Trump would turn everything into a season of The Apprentice; you're always auditioning," he added. "'Okay, you want to be a Bitcoin advisor? I'm going to bring in three more people to compete for this position.'" Bailey eventually prevailed, rallying industry leaders to raise over $1 billion for Trump's campaign, with $21 million raised just at the Nashville conference. At that event, Trump's famous commitment to make the U.S. the global cryptocurrency capital became well known.
"He was very unsure at first, but the cheers of the live audience changed his attitude. As he left, he said, 'These Bitcoin enthusiasts like me; they are my people,'" Bailey recalled. He now serves as an informal advisor to the president. He believes that Trump simply realized that cryptocurrency was being treated differently from all other asset classes (post-election, Trump has profited hundreds of millions from the cryptocurrency realm). Bailey's view is that the current goal is to create a level playing field, with the grander vision of making the U.S. the most Bitcoin-friendly country for global business.
Bailey claims that in his 13-year career, he has invested in over 100 Bitcoin-related companies, with top performers like Metaplanet and Smarter Web turning hundreds of millions of dollars in investments into hundredfold returns. He says the return is not just financial, as good ideas are replicated. "If thousands of Bitcoin companies thrive, we all win."
This Buffett-inspired long-term vision is now driving KindlyMD's development. Bailey envisions building it into a large holding company with profitable and independently operated subsidiaries. For him, this is not just an investment strategy, but a reenactment of monetary history. His concept of "Bitcoin Standard" echoes the evolution of gold: the gold-silver exchange evolved into gold-silver banks, further developing into central banks and investment banks. He believes that today's Bitcoin treasury companies are the digital-age gold-silver exchanges, moving toward a new type of bank.
KindlyMD is driving this transformation. The company has already invested in other Bitcoin holding companies, namely Japan's Metaplanet and the Netherlands' Treasury B.V. "Imagine nurturing an ETF," Bailey explains, "What we are doing is exactly that—nurturing these actively managed ETFs on a global scale in the form of corporate stock." Of course, like other newly established crypto treasury companies, Bailey's approach to entering the public market bypasses the U.S. Securities and Exchange Commission's (SEC) scrutiny of ETFs and IPOs.
Despite KindlyMD's lackluster "Wall Street debut," Bailey is not too concerned. "The best thing about Bitcoin is it's very forgiving; you can make mistakes in your career and start over," Bailey says.
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