Adam Back is one of the earliest and most prominent champions of Bitcoin’s displacement of traditional finance via decentralization and self-sovereignty.
However, his latest move—selling 30,000 bitcoin (BTC) to Wall Street giant Cantor Fitzgerald via a SPAC—has drawn scrutiny from those who see it as betraying some of the principles he once passionately espoused.
Back was a cypherpunk. His community created BTC and fought for privacy, individual sovereignty, and displacing government-backed banking.
In public statements throughout the years, he has repeatedly championed the network’s resistance to entrenched banking interests.
Although he did not self-identify as a libertarian, many interviewers and journalists referred to him as such.
In forum and social media posts under his “adam3us” username, Back prioritized liberty, free markets, hard money principles, and Austrian economics.
He’s staunchly opposed KYC mandates on self-custody wallets and even created Hashcash in 1997, a proof-of-work protocol that Satoshi Nakamoto cited as a foundational technology for BTC mining.
Back was also on the cypherpunk mailing list, the members of which were the first to receive a copy of the BTC whitepaper from Nakamoto.
This made it surprising to many when it was announced that Back is negotiating a $3 billion deal with a brokerage founded by US Commerce Secretary and Cabinet member Howard Lutnick.
Step aside, cypherpunks, the bankers have returned
Specifically, the 30,000 BTC Back would provide would go into a blank check vehicle, Cantor Equity Partners 1, and allow insiders to cash out exposure to that BTC by selling shares in this entity to the public.
That blank check entity expects to rename itself BSTR Holdings. Under its current ticker symbol, CEPO, it has already rallied 28% in anticipation.
This rally provides one obvious motivation: profit from traditional finance.
Wall Street banks securitize Adam Back’s bitcoin
Many bitcoin treasury companies trade at an inflated premium to their BTC holdings, colloquially called a multiple-to-Net Asset Value, that have reached stratospheric valuations as high as 23X.
Because the shares sell for more than the value of bitcoin added, insiders can grab immediate cash returns.
According to data from BitcoinTreasuries.net, approximately 150 public companies, likely motivated by this lucrative financial opportunity, have added bitcoin to their balance sheet.
Back himself has even launched a Swedish bitcoin treasury company, H100 Group. It rallied from about 1.50 Swedish Kronor as of Back’s formative announcement to today’s KR10.80.
Through traditional banks and brokerages, Back made money abroad selling stock in a bitcoin treasury firm. He wants to do it again on US markets.
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Cantor Fitzgerald is a financial services giant. It is well-known in the crypto industry for managing many of the US Treasuries backing tether (USDT).
Immediately prior to accepting his Presidentially appointed Cabinet position, Lutnick transferred ownership of Cantor Fitzgerald to his children, yet the company’s ties to powerful bankers remain.
Chancellor on brink of second bailout
Bitcoin was a response to mistrust of mainstream financial institutions and government bailouts of Wall Street banks. Nakamoto inscribed a headline about this in Bitcoin’s Genesis Block: “Chancellor on brink of second bailout for banks.”
Obviously, it is natural to wonder what Back is doing returning BTC to mainstream financial institutions and listing shares through investment banks. In other words, has he sold out?
Perhaps BTC’s recent rally to all-time highs because of its leveraged acquisition by corporations and bank-custodied spot ETFs has made it easy to forget why Back led an anti-TradFi movement in the first place.
Or perhaps, as at least some bitcoiners believe, bitcoin treasury companies are an important step on the journey to hyperbitcoinization, where bitcoin will displace other forms of currency and many forms of value, and these bitcoiners may consider these seeming contradictions to actually be evidence of moving society towards hyperbitcoinization.
