CEPO: Waiting To Buy Adam Back's Bitcoin Treasury Company

Summary Adam Back's company is merging with Cantor Equity Partners I to form a Bitcoin Standard Treasury Company, holding over 30,000 bitcoin and $1.5B in PIPE financing.

Bitcoin treasury companies are valued by Market Net Asset Value (mNAV), focusing on the market value of their bitcoin holdings minus debt.

We can estimate the new entities market cap if it trades in line with a similar market cap ratio relative to mNav as Strategy.

Early investors in CEPO lack clarity into the new entity's path to growing bitcoin per share as well as the shares outstanding in the new entity until the merger completes.

Another day, another bitcoin treasury company.

Weekly, sometimes daily, it seems another company makes it their strategy to build a bitcoin treasury or convert their balance sheet to holding bitcoin.

Cantor Equity Partners II( CEPO ) has become one of the latest companies to announce that they will be reverse merging into a bitcoin treasury company with Adam Back as CEO .

If you've been interested in bitcoin for any length of time, Adam Back's name might sound familiar.

He was a pioneer in cryptography and one of the first proponents of bitcoin.

Following a reverse merger, his company will be going to market with over 30 thousand bitcoin and $1.5 billion in "PIPE" financing.

More on that later.

Adam Back has been a fierce proponent of bitcoin for the freedom that it offers individuals who find themselves under assault from the traditional financial system.

Although his money has always been where his mouth is, this furthers his commitment to advocating for and creating a bitcoin world. “ We are putting unprecedented firepower behind a single mission: Maximizing Bitcoin ownership per share while accelerating real-world Bitcoin adoption,” said Adam Back.

Once the merger is completed, the company will appropriately be called Bitcoin Standard Treasury Company or BSTR Holdings, Inc. and trade under the ticker BSTR.

Cantor Equity Partners and Twenty One Capital This announcement comes on the heels of the April 22 announcement that Cantor Equity Partners, not to be confused with Cantor Equity Partners I, would enter a definitive reverse merger agreement with CEO Jack Maller's newly formed Twenty One Capital.

I wrote an article discussing that merger here .

Cantor Fitzgerald's CEO, Brandon Lutnick made this comment regarding this second bitcoin treasury company reverse merger.

As a long-time Bitcoin advocate, Cantor is incredibly proud to partner with Dr.

Back, one of Bitcoin's leading luminaries, to launch BSTR.

Bitcoin Standard Treasury Company "PIPE" Financing PIPE Financing stands for "Private Investment in Public Equity." Adam Backs' company has the potential for $1.5 billion in fiat PIPE financing from various sources.

This is potentially three times as large as the PIPE financing obtained from the Cantor Equity Partners announcement which indicates a continued and potentially growing demand for bitcoin treasury investments.

Here is a breakdown of BSTR's Pipe Financing. $400 million of common equity Up to $750 million in convertible senior notes Up to $350 million in convertible preferred stock In addition to this PIPE financing, there are other components that will make CEPO an investment lacking clarity prior to the merger.

For example, there will be a potential for CEPO shareholders to convert their shares into shares of BSTR at a $10 per share conversion rate.

There are several examples like this where the conversion rate and thus the number of shares will not be known until the merger is finalized.

C-Suite Adam Back - Chief Executive Officer Adam Back was one of the original cryptographers and created Hashcash in 1997 as an attempt at creating digital money.

His work on Hashcash later became cited within the bitcoin whitepaper.

Then in 2014, Adam Back co-founded Blockstream which still operates today and focuses on a variety of strategies to grow the bitcoin ecosystem.

Back became the CEO of Blockstream in October 2016. Sean Bill - Chief Investment Officer Sean Bill is currently also the Chief Investment Officer at Blockstream and will become the CIO alongside Adam Back at BSTR as well.

Sean Bill had over three decades of experience before coming to Blockstream where he has worked alongside CEO Back to bridge bitcoin with traditional finance.

Cantor Equity Partners I and their mNAV Bitcoin treasury companies have come to be valued by market analysts based on their mNAV or Market Net Asset Value.

Market Net Asset Value is effectively valuing the company's balance sheet based on the market value of their assets less their debt.

For example, Strategy( MSTR ), formerly known as Microstrategy, who just reported earnings on July 31, 2025 owns 628,791 bitcoins .

Their stock currently trades at $366 per share.

Based on the number of bitcoin they own, the market value of their bitcoin is 628,791 bitcoin x $113,000/bitcoin = ~$71 billion.

Then subtracting debt of $14.4 billion, this gives them a mNAV of ~$56.6 billion.

Strategy trades with a market cap of $114 billion giving them a valuation of ~2 times mNAV.

CEPO expects to come to market with about 30,000 bitcoin which will give them an mNAV of ~$3.4 billion.

By applying the same multiple, we can expect CEPO to have a market cap of about $6.8 billion.

Difficulty Estimating BSTR Shares Outstanding After Merger In order to determine the value of a share of CEPO, you must know how many shares outstanding of BSTR there will be and what proportion of those shares will go to CEPO holders.

But as you will see below, estimating the BSTR shares outstanding after the merger makes this a constantly moving target. $400 million in common equity priced at $10.00 per share implying 40 million shares.

Up to $750 million in convertible senior notes, with $500 million committed and an option for an additional $250 million, convertible at $13.00 per share.

Up to $350 million in convertible preferred stock, with $30 million committed and an option for an additional $320 million, also convertible at a common stock equivalent price of $13.00 per share. 5,021 Bitcoin in-kind PIPE priced at $10.00 per share.

The number of shares will depend on bitcoin's price at time of conversion. 25,000 Bitcoin contributed by founding shareholders, priced at $10.00 per share.

The number of shares will depend on bitcoin's price at time of conversion.

Up to $200 million from CEPO, subject to shareholder redemptions, also priced at $10.00 per share.

Again, it is unclear how many shares of BSTR this will convert into.

As you can see, estimating the shares outstanding along with the number of shares that CEPO will convert into, is near impossible.

Whereas, CEP had more straightforward terms as to how many shares would be created from the start.

Cantor Equity Partners II & III So far, Cantor Equity Partners( CEP ) and Cantor Equity Partners I( CEPO ) have made announcements to become bitcoin treasury companies through strategic reverse mergers.

As a sidenote, there are currently two more Cantor Equity Partners SPACs that trade publicly in the market.

What are Cantor Equity Partners' plans for these companies? If you can follow the trend, one might expect them to also become bitcoin treasury companies after finding their Jack Mallers or Adam Back to steer the company.

This creates the question, does buying these two public SPACs also present an opportunity or a risk for potential investors? That all depends on a person's risk tolerance as buying these tickers right now is pure speculation.

Here is brief overview of the timing of the various Cantor Equity Partner SPACs IPOs and their merger announcement date, if they have had one.

It may be a little self-serving, but Cantor has also recently come out with an analyst report noting their bullishness on bitcoin treasury companies.

SPAC Name IPO Date Merger Announcement Date Cantor Equity Partners 8/13/2024 4/22/2025 Cantor Equity Partners I 1/7/2025 7/17/2025 Cantor Equity Partners II( CEPT ) 5/2/2025 TBD Cantor Equity Partners III( CAEP ) 6/26/2025 TBD Risks The risks of purchasing CEPO at this pre-merger stage are very similar to the risks I listed in my article about CEP .

Owning Bitcoin By owning CEPO, you are owning a bitcoin treasury company which means you will be directly affected by bitcoin's price.

If you don't think its a good idea to own bitcoin, then you shouldn't own CEPO.

Business Strategy If you choose to invest in CEPO ahead of the reverse merger, you may be assuming more risk as it is unclear how BSTR plans to grow its bitcoin per share for its shareholders.

Although Adam Back and Sean Bill have tremendous experience and connections, it would be a leap of faith to invest without understanding their business strategy.

Conversion Ratios Like I spoke about above, there is a lot of ambiguity as to how many shares outstanding there will be after the reverse merger is completed.

It depends on various factors which make it difficult.

For example, around 5,000 of the bitcoin will be converted to BSTR at $10 per share and this makes the number of shares dependent upon the bitcoin price when BSTR is issued.

Opportunity Cost As with any investment, there is the risk of investing one way and missing out on another.

For example, by investing in CEPO, you might be missing out on investing in a more established bitcoin treasury company such as Strategy, which has a more established path forward.

Market Saturation and Feedback Loops That Eventually End One risk to consider is the market saturation for bitcoin treasury companies.

This is a risk that I don't consider a major risk as I believe there is ample demand for bitcoin remaining in the market and I expect each bitcoin treasury company to eventually find new ways to drive bitcoin yield, leveraging their own expertise to unlock new capital markets.

And if they find new capital markets, then every other bitcoin treasury company shares in their success as the bitcoin price will likely respond positively.

I see a synergistic positive feedback loop...until it stops.

If companies begin overleveraging, using debt instruments to purchase more bitcoin, then perhaps investors will know they should begin to be more cautious.

Although I don't think we are there yet, this is undoubtedly a risk and investors should understand it and proceed cautiously with that in mind.

Conclusion My conclusion for CEPO is the same as it was for CEP.

Without having more information on how Adam Back's company will earn a return on their bitcoin stack and increase bitcoin yield for investors, it is too early to recommend buying or selling CEPO and I rate it a hold.

Furthermore, add to the uncertainty, it is unclear how many shares outstanding there will be after the merger is completed.

I'd rather wait and see how many there will be before I try to understand the value of the shares.

Strategy, or MSTR, remains the gold standard with an already well-established pipeline of financial products producing bitcoin yield for their shareholders.

I believe it is wiser to invest in Strategy if you want to invest in a bitcoin treasury company.

This is subject to change as these new bitcoin treasury companies establish their own strategies to access new capital to drive bitcoin yield for their shareholders..