Another day, another company buying millions of dollars in cryptocurrencies.
On Monday, the Ethena Foundation, the non-profit organisation backing the stablecoin project Ethena, announced the founding of a new company called StablecoinX to buy up the project’s native ENA tokens.
StablecoinX will merge with TLGY Acquisition Corp., a special purpose acquisition company, with plans to list under the ticker USDE on the Nasdaq.
Treasury trend meets stablecoins
Though hundreds of crypto treasury companies have hit this market this year, Guy Young, the co-founder of Ethena, says StablecoinX’s proximity to the booming stablecoin trend will make the venture even more attractive to investors.
Upon listing, shares in Circle, the issuer of the second-largest stablecoin and only publicly traded stablecoin firm on the market, soared more than 160% on their first day of trading.
Young says there’s plenty of room for more offerings of the same.
So far, the new venture has raised $360 million to execute its Ethena buying spree through the sale of company shares, with funding from Galaxy Digital, Pantera Capital, and Haun Ventures, among others.
ENA buying spree
Of the $360 million raised, StablecoinX sold $100 million in shares in exchange for locked ENA tokens, with the remaining $260 million denominated in cash.
Over the next six weeks, the company will spend $260 million to buy up more locked ENA tokens from the Ethena Foundation.
The Ethena Foundation will then use the proceeds from the sale of locked tokens to buy spot Ethena tokens.
Any capital allocation decisions must be made with the approval of the Ethena Foundation.
The company cannot sell or lend tokens without the direct approval from the foundation.
“It’s a cool outcome where you can get something that looks like a permanent capital vehicle, which is really just sucking up and absorbing tokens with no real intention to sell it going forward,” said Young.
So far, investors are buying it.
The Ethena token is up over 50% in the past week.
