Trump Crypto Mentor Places $653 Million Bitcoin Bet, Why Isn't Wall Street Buying It?

By: blockbeats|2025/11/03 11:30:02

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."

Trump Crypto Mentor Places $653 Million Bitcoin Bet, Why Isn't Wall Street Buying It?

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.

Original Article Link

Foreword: Today, the People's Bank of China's website published the "Notice of the People's Bank of China, National Development and Reform Commission, Ministry of Industry and Information Technology, Ministry of Public Security, State Administration for Market Regulation, China Banking and Insurance Regulatory Commission, China Securities Regulatory Commission, State Administration of Foreign Exchange on Further Preventing and Dealing with Risks Related to Virtual Currency and Others (Yinfa [2026] No. 42)", the latest regulatory requirements from the eight departments including the central bank, which are basically consistent with the regulatory requirements of recent years. The main focus of the regulation is on speculative activities such as virtual currency trading, exchanges, ICOs, overseas platform services, and this time, regulatory oversight of RWA has been added, explicitly prohibiting RWA tokenization, stablecoins (especially those pegged to the RMB). The following is the full text:

To the people's governments of all provinces, autonomous regions, and municipalities directly under the Central Government, the Xinjiang Production and Construction Corps:

Recently, there have been speculative activities related to virtual currency and Real-World Assets (RWA) tokenization, disrupting the economic and financial order and jeopardizing the property security of the people. In order to further prevent and address the risks related to virtual currency and Real-World Assets tokenization, effectively safeguard national security and social stability, in accordance with the "Law of the People's Republic of China on the People's Bank of China," "Law of the People's Republic of China on Commercial Banks," "Securities Law of the People's Republic of China," "Law of the People's Republic of China on Securities Investment Funds," "Law of the People's Republic of China on Futures and Derivatives," "Cybersecurity Law of the People's Republic of China," "Regulations of the People's Republic of China on the Administration of Renminbi," "Regulations on Prevention and Disposal of Illegal Fundraising," "Regulations of the People's Republic of China on Foreign Exchange Administration," "Telecommunications Regulations of the People's Republic of China," and other provisions, after reaching consensus with the Cyberspace Administration of China, the Supreme People's Court, and the Supreme People's Procuratorate, and with the approval of the State Council, the relevant matters are notified as follows:

I. Clarify the essential attributes of virtual currency, Real-World Assets tokenization, and related business activities

(I) Virtual currency does not possess the legal status equivalent to fiat currency. Virtual currencies such as Bitcoin, Ether, Tether, etc., have the main characteristics of being issued by non-monetary authorities, using encryption technology and distributed ledger or similar technology, existing in digital form, etc. They do not have legal tender status, should not and cannot be circulated and used as currency in the market.

The business activities related to virtual currency are classified as illegal financial activities. The exchange of fiat currency and virtual currency within the territory, exchange of virtual currencies, acting as a central counterparty in buying and selling virtual currencies, providing information intermediary and pricing services for virtual currency transactions, token issuance financing, and trading of virtual currency-related financial products, etc., fall under illegal financial activities, such as suspected illegal issuance of token vouchers, unauthorized public issuance of securities, illegal operation of securities and futures business, illegal fundraising, etc., are strictly prohibited across the board and resolutely banned in accordance with the law. Overseas entities and individuals are not allowed to provide virtual currency-related services to domestic entities in any form.

A stablecoin pegged to a fiat currency indirectly fulfills some functions of the fiat currency in circulation. Without the consent of relevant authorities in accordance with the law and regulations, any domestic or foreign entity or individual is not allowed to issue a RMB-pegged stablecoin overseas.

（II）Tokenization of Real-World Assets refers to the use of encryption technology and distributed ledger or similar technologies to transform ownership rights, income rights, etc., of assets into tokens (tokens) or other interests or bond certificates with token (token) characteristics, and carry out issuance and trading activities.

Engaging in the tokenization of real-world assets domestically, as well as providing related intermediary, information technology services, etc., which are suspected of illegal issuance of token vouchers, unauthorized public offering of securities, illegal operation of securities and futures business, illegal fundraising, and other illegal financial activities, shall be prohibited; except for relevant business activities carried out with the approval of the competent authorities in accordance with the law and regulations and relying on specific financial infrastructures. Overseas entities and individuals are not allowed to illegally provide services related to the tokenization of real-world assets to domestic entities in any form.

II. Sound Work Mechanism

(III) Inter-agency Coordination. The People's Bank of China, together with the National Development and Reform Commission, the Ministry of Industry and Information Technology, the Ministry of Public Security, the State Administration for Market Regulation, the China Banking and Insurance Regulatory Commission, the China Securities Regulatory Commission, the State Administration of Foreign Exchange, and other departments, will improve the work mechanism, strengthen coordination with the Cyberspace Administration of China, the Supreme People's Court, and the Supreme People's Procuratorate, coordinate efforts, and overall guide regions to carry out risk prevention and disposal of virtual currency-related illegal financial activities.

The China Securities Regulatory Commission, together with the National Development and Reform Commission, the Ministry of Industry and Information Technology, the Ministry of Public Security, the People's Bank of China, the State Administration for Market Regulation, the China Banking and Insurance Regulatory Commission, the State Administration of Foreign Exchange, and other departments, will improve the work mechanism, strengthen coordination with the Cyberspace Administration of China, the Supreme People's Court, and the Supreme People's Procuratorate, coordinate efforts, and overall guide regions to carry out risk prevention and disposal of illegal financial activities related to the tokenization of real-world assets.

(IV) Strengthening Local Implementation. The people's governments at the provincial level are overall responsible for the prevention and disposal of risks related to virtual currencies and the tokenization of real-world assets in their respective administrative regions. The specific leading department is the local financial regulatory department, with participation from branches and dispatched institutions of the State Council's financial regulatory department, telecommunications regulators, public security, market supervision, and other departments, in coordination with cyberspace departments, courts, and procuratorates, to improve the normalization of the work mechanism, effectively connect with the relevant work mechanisms of central departments, form a cooperative and coordinated working pattern between central and local governments, effectively prevent and properly handle risks related to virtual currencies and the tokenization of real-world assets, and maintain economic and financial order and social stability.

III. Strengthened Risk Monitoring, Prevention, and Disposal

(5) Enhanced Risk Monitoring. The People's Bank of China, China Securities Regulatory Commission, National Development and Reform Commission, Ministry of Industry and Information Technology, Ministry of Public Security, State Administration of Foreign Exchange, Cyberspace Administration of China, and other departments continue to improve monitoring techniques and system support, enhance cross-departmental data analysis and sharing, establish sound information sharing and cross-validation mechanisms, promptly grasp the risk situation of activities related to virtual currency and real-world asset tokenization. Local governments at all levels give full play to the role of local monitoring and early warning mechanisms. Local financial regulatory authorities, together with branches and agencies of the State Council's financial regulatory authorities, as well as departments of cyberspace and public security, ensure effective connection between online monitoring, offline investigation, and fund tracking, efficiently and accurately identify activities related to virtual currency and real-world asset tokenization, promptly share risk information, improve early warning information dissemination, verification, and rapid response mechanisms.

(6) Strengthened Oversight of Financial Institutions, Intermediaries, and Technology Service Providers. Financial institutions (including non-bank payment institutions) are prohibited from providing account opening, fund transfer, and clearing services for virtual currency-related business activities, issuing and selling financial products related to virtual currency, including virtual currency and related financial products in the scope of collateral, conducting insurance business related to virtual currency, or including virtual currency in the scope of insurance liability. Financial institutions (including non-bank payment institutions) are prohibited from providing custody, clearing, and settlement services for unauthorized real-world asset tokenization-related business and related financial products. Relevant intermediary institutions and information technology service providers are prohibited from providing intermediary, technical, or other services for unauthorized real-world asset tokenization-related businesses and related financial products.

(7) Enhanced Management of Internet Information Content and Access. Internet enterprises are prohibited from providing online business venues, commercial displays, marketing, advertising, or paid traffic diversion services for virtual currency and real-world asset tokenization-related business activities. Upon discovering clues of illegal activities, they should promptly report to relevant departments and provide technical support and assistance for related investigations and inquiries. Based on the clues transferred by the financial regulatory authorities, the cyberspace administration, telecommunications authorities, and public security departments should promptly close and deal with websites, mobile applications (including mini-programs), and public accounts engaged in virtual currency and real-world asset tokenization-related business activities in accordance with the law.

(8) Strengthened Entity Registration and Advertisement Management. Market supervision departments strengthen entity registration and management, and enterprise and individual business registrations must not contain terms such as "virtual currency," "virtual asset," "cryptocurrency," "crypto asset," "stablecoin," "real-world asset tokenization," or "RWA" in their names or business scopes. Market supervision departments, together with financial regulatory authorities, legally enhance the supervision of advertisements related to virtual currency and real-world asset tokenization, promptly investigating and handling relevant illegal advertisements.

（IX） Continued Rectification of Virtual Currency Mining Activities. The National Development and Reform Commission, together with relevant departments, strictly controls virtual currency mining activities, continuously promotes the rectification of virtual currency mining activities. The people's governments of various provinces take overall responsibility for the rectification of "mining" within their respective administrative regions. In accordance with the requirements of the National Development and Reform Commission and other departments in the "Notice on the Rectification of Virtual Currency Mining Activities" (NDRC Energy-saving Building [2021] No. 1283) and the provisions of the "Guidance Catalog for Industrial Structure Adjustment (2024 Edition)," a comprehensive review, investigation, and closure of existing virtual currency mining projects are conducted, new mining projects are strictly prohibited, and mining machine production enterprises are strictly prohibited from providing mining machine sales and other services within the country.

（X） Severe Crackdown on Related Illegal Financial Activities. Upon discovering clues to illegal financial activities related to virtual currency and the tokenization of real-world assets, local financial regulatory authorities, branches of the State Council's financial regulatory authorities, and other relevant departments promptly investigate, determine, and properly handle the issues in accordance with the law, and seriously hold the relevant entities and individuals legally responsible. Those suspected of crimes are transferred to the judicial authorities for processing according to the law.

（XI） Severe Crackdown on Related Illegal and Criminal Activities. The Ministry of Public Security, the People's Bank of China, the State Administration for Market Regulation, the China Banking and Insurance Regulatory Commission, the China Securities Regulatory Commission, as well as judicial and procuratorial organs, in accordance with their respective responsibilities, rigorously crack down on illegal and criminal activities related to virtual currency, the tokenization of real-world assets, such as fraud, money laundering, illegal business operations, pyramid schemes, illegal fundraising, and other illegal and criminal activities carried out under the guise of virtual currency, the tokenization of real-world assets, etc.

（XII） Strengthen Industry Self-discipline. Relevant industry associations should enhance membership management and policy advocacy, based on their own responsibilities, advocate and urge member units to resist illegal financial activities related to virtual currency and the tokenization of real-world assets. Member units that violate regulatory policies and industry self-discipline rules are to be disciplined in accordance with relevant self-regulatory management regulations. By leveraging various industry infrastructure, conduct risk monitoring related to virtual currency, the tokenization of real-world assets, and promptly transfer issue clues to relevant departments.

IV. Strict Supervision of Domestic Entities Engaging in Overseas Business Activities

（XIII） Without the approval of relevant departments in accordance with the law and regulations, domestic entities and foreign entities controlled by them may not issue virtual currency overseas.

（XIV） Domestic entities engaging directly or indirectly in overseas external debt-based tokenization of real-world assets, or conducting asset securitization activities abroad based on domestic ownership rights, income rights, etc. (hereinafter referred to as domestic equity), should be strictly regulated in accordance with the principles of "same business, same risk, same rules." The National Development and Reform Commission, the China Securities Regulatory Commission, the State Administration of Foreign Exchange, and other relevant departments regulate it according to their respective responsibilities. For other forms of overseas real-world asset tokenization activities based on domestic equity by domestic entities, the China Securities Regulatory Commission, together with relevant departments, supervise according to their division of responsibilities. Without the consent and filing of relevant departments, no unit or individual may engage in the above-mentioned business.

(15) Overseas subsidiaries and branches of domestic financial institutions providing Real World Asset Tokenization-related services overseas shall do so legally and prudently. They shall have professional personnel and systems in place to effectively mitigate business risks, strictly implement customer onboarding, suitability management, anti-money laundering requirements, and incorporate them into the domestic financial institutions' compliance and risk management system. Intermediaries and information technology service providers offering Real World Asset Tokenization services abroad based on domestic equity or conducting Real World Asset Tokenization business in the form of overseas debt for domestic entities directly or indirectly venturing abroad must strictly comply with relevant laws and regulations. They should establish and improve relevant compliance and internal control systems in accordance with relevant normative requirements, strengthen business and risk control, and report the business developments to the relevant regulatory authorities for approval or filing.

V. Strengthen Organizational Implementation

(16) Strengthen organizational leadership and overall coordination. All departments and regions should attach great importance to the prevention of risks related to virtual currencies and Real World Asset Tokenization, strengthen organizational leadership, clarify work responsibilities, form a long-term effective working mechanism with centralized coordination, local implementation, and shared responsibilities, maintain high pressure, dynamically monitor risks, effectively prevent and mitigate risks in an orderly and efficient manner, legally protect the property security of the people, and make every effort to maintain economic and financial order and social stability.

(17) Widely carry out publicity and education. All departments, regions, and industry associations should make full use of various media and other communication channels to disseminate information through legal and policy interpretation, analysis of typical cases, and education on investment risks, etc. They should promote the illegality and harm of virtual currencies and Real World Asset Tokenization-related businesses and their manifestations, fully alert to potential risks and hidden dangers, and enhance public awareness and identification capabilities for risk prevention.

VI. Legal Responsibility

(18) Engaging in illegal financial activities related to virtual currencies and Real World Asset Tokenization in violation of this notice, as well as providing services for virtual currencies and Real World Asset Tokenization-related businesses, shall be punished in accordance with relevant regulations. If it constitutes a crime, criminal liability shall be pursued according to the law. For domestic entities and individuals who knowingly or should have known that overseas entities illegally provided virtual currency or Real World Asset Tokenization-related services to domestic entities and still assisted them, relevant responsibilities shall be pursued according to the law. If it constitutes a crime, criminal liability shall be pursued according to the law.

(19) If any unit or individual invests in virtual currencies, Real World Asset Tokens, and related financial products against public order and good customs, the relevant civil legal actions shall be invalid, and any resulting losses shall be borne by them. If there are suspicions of disrupting financial order and jeopardizing financial security, the relevant departments shall deal with them according to the law.

This notice shall enter into force upon the date of its issuance. The People's Bank of China and ten other departments' "Notice on Further Preventing and Dealing with the Risks of Virtual Currency Trading Speculation" (Yinfa [2021] No. 237) is hereby repealed.

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