The letter, which was first reported by the Financial Times, cautioned investors that the “inevitable collapse” of the crypto bubble “could wreak havoc in ways we cannot yet anticipate.” Elliott also warned that the White House’s embrace of cryptocurrency would weaken the role of the U.S. dollar in the global economy by diminishing its role as the world’s primary reserve currency.

The size of the crypto bubble and therefore the risks it posed to investors and the economy had increased sharply recently because of its “perceived proximity to the White House,” Elliott said in the letter. 

Elliott declined to comment. The White House did not immediately respond to a request for comment. 

During the campaign, Trump regularly declared his support for cryptocurrencies and his desire to see the U.S. become the dominant country in the industry. The president has also been involved in several crypto ventures including crypto platform World Liberty Financial and launching a memecoin of his own. In addition, his media company announced plans earlier this week to develop a fintech service that would allow for the trading of digital assets, among other things. 

Since Trump’s election win in November, crypto prices have soared along with stocks associated with the industry as well as U.S. markets overall. Just a few days after taking office, Trump signed an executive order that began the process for creating a national reserve of digital assets. 

Elliott said it had “never seen a market like this” with so many investors pumping money into the market based purely on speculative hype. Elliott also warned against a surge in prices for speculative assets it believed had “no substance.” That category of asset, which includes memecoins, has no underlying value and is instead only fueled by investors’ hope that they’ll be able to find someone else who will pay a higher price for it than they did. 

“Crypto is ground zero” for these speculative assets, Elliott wrote in the letter. 

In Elliott’s view, this had driven flocks of investors toward crypto. But many of them were merely hoping that the market would continue to go up. They are “acting like a crowd of sports bettors,” the letter read. 

But the crypto bubble doesn’t just pose a risk to individual investors, who are at risk of seeing their investments wiped out should a bubble pop. The support for cryptocurrencies from the White House, and specifically the effort to create a national reserve, would harm the U.S. dollar, according to Elliott, which also said that any support from public officials for policies that might result in “marginalizing the dollar” was “profoundly dangerous.” 

Elliott is no stranger to combative market dynamics. The firm is a powerful activist investor, founded by Paul Singer, that has often taken on companies in extended boardroom battles. As an activist investor, Elliott often identifies companies that are not performing as well as they could be and believes it can right the ship.

The firm has even taken on similar postures with governments. Most memorably in Argentina it engaged in a 15-year legal battle with the government over missed debt payments as one of the country’s creditors. Elliott eventually reached a $2 billion settlement with the Argentine government.

Grayscale, one of the largest crypto ETF issuers, filed an application with the Securities and Exchange Commission on Thursday to convert its XRP trust into an ETF that could be traded on the New York Stock Exchange. The trust currently holds about $16.1 million invested by accounts “seeking exposure to XRP without the cost and complexity of purchasing the asset directly,” according to the filing. 

“As an innovative and future-forward asset manager, Grayscale is committed to continuously identifying opportunities to offer products that meet client demand and expand investor access to digital assets and the broader DeFi ecosystem,” Dave LaValle, Global Head of ETFs at Grayscale, said in a statement. 

The filing is just one of many applications for new crypto ETFs—including those for Solana, Dogecoin and Litecoin—that have been submitted by various companies since Trump was elected, ushering in a new era of industry-friendly regulation. Crypto bulls are anxiously awaiting the appointment of Trump’s pick for SEC chair, crypto advocate Paul Atkins, who many believe will take a more lenient approach to securities enforcement than the previous chair, Gary Gensler. 

Still, Bloomberg analyst James Seyffart cautions against being overly optimistic at this time. While he believes it is possible that XRP ETFs will be approved in 2025, he says ETFs for other cryptocurrencies will likely come first. He specifically noted Litecoin, Bitcoin’s lesser-known relative.

Seyffart says that ongoing SEC lawsuits involving XRP assert that the cryptocurrency is a security, barring it from being approved for an ETF. If Atkins is confirmed, it is likely that he will either wind down or drop these suits entirely, but it’s unclear when that will happen. The same applies for Solana ETFs, which Grayscale has also filed for. 

“There’s some more work that needs to be done on that front that doesn’t need to happen with something like Litecoin,” Seyffart said. “The SEC has never called Litecoin a security so, I wouldn’t be surprised if you see Litecoin come first.”

However, Monica Long, president of Ripple, the company behind XRP, told Bloomberg earlier this month that she thinks an XRP ETF is “next in line” and will be approved “very soon.”

Other asset managers that have filed for XRP ETFs include Bitwise, Wisdom Tree, and Canary.

I sat down with Ardoino shortly after the announcement to ask about Tether’s recent strategic decisions, including the establishment of a headquarters in El Salvador. He also explained his ambitious plans for new product launches and focus on real-world applications of blockchain technology.

The conversation underscored Ardroino’s belief that Tether—even as it works to overcome longstanding questions about transparency and governance—wants to not only maintain its position as the leading stablecoin, but also to expand its social and political influence. The conversation has been edited for brevity and clarity.

Anna Tutova: Why did you select El Salvador as your headquarters? 

Paolo Ardoino:El Salvador is a great country. We started coming here in 2021. We saw the country before the activity that the President did in order to make it more secure.

In 2021 El Salvador was considered the murder capital of the world. And in 2022, the President decided to give a new life to his own citizens, bringing stability, peace, security, removing the gang members, putting them in jail, making the country very secure. 

Now it’s considered the safest country in the Americas and one of the safest countries in the world. This shows that if you have the right politician that cares about the country, his own population, he can make wonders, he can actually change the status quo, he can change history. And I believe that El Salvador is going through a renaissance moment, so we are just excited to be part of this new chapter of the country. Look, I’m a citizen now here as well, but I’m Italian and I wish we had such great politicians in Italy.

AT: El Salvador, as part of a recent loan package with the IMF, had to rescind its designation of Bitcoin as legal tender, meaning merchants no longer have to accept it. What do you think about this shift? 

PA: So I think given the philosophy of Bitcoin, it should never be pushed down the throat of people. It should have been optional from the beginning. But most importantly, the country is buying Bitcoin every single day with their treasury so while they reach an agreement with the IMF, the commitment of the country to Bitcoin is not changing, they are doubling down on education and crypto payment infrastructure.

We don’t want Bitcoiners to be equal to the fiat maximalists that are forcing fiat to everyone and forcing acceptance of fiat to everyone. We want Bitcoin to be optional, to be chosen because it’s the best way to pay, not because it’s the forced way to pay.

AT: The United States now has a pro-crypto President Trump. How do you see the development of crypto regulation there now? Will Tether consider expanding its presence in the U.S.? 

PA: So, the U.S. is going to be a very interesting development. With USDT we don’t have at this moment plans to enter the US, but we definitely are planning to meet the requirements, if any, that will be included in the upcoming stablecoin legislation.

We believe that the US is going to be very, very important mostly as a jurisdiction that all the other countries are looking at. The previous administration was kind of against it but now it was made very clear from the new administration that crypto and artificial intelligence are high priorities for the country.

So while we don’t plan to enter the US at this moment, we believe that this clarity at the level of regulation, legislation and support from the administration is very important and will also allow the adoption of USDT outside the US at a much faster and higher rate.

AT: Why don’t you have plans to expand in the U.S.? Is it because of the current regulations? 

PA: Not really. I think that every company needs to pick its own battles. There are 1.3 billion people in the world that don’t have bank accounts, they are called unbanked. They are not bad people, but they are just too poor of interest to banks. 

The U.S. is a market that has 20-30 payment ways that you can pay with: PayPal, cash, bank wires, credit card, debit cards, you name it. So there is an incredible competition. And outside the U.S. it’s very difficult to pay in dollars, and everyone wants U.S. dollars. So anytime you build a company, you have to think about who your audience is and which battles you should pick. 

AT: Getting back to El Salvador, can you tell how you see the crypto ecosystem here?

PA: I think that we are going to see a growth in the crypto ecosystem, a very rapid one in the next few years. Especially our move here to El Salvador raised a lot of excitement. We are going to build a tower, a very tall tower, probably 70 floors, the biggest tower in El Salvador and one of the biggest and highest in the region. 

So that tower will be filled by great companies that will want to make El Salvaldor and Latin America great. Sometimes you just need one company that takes the first steps and then it gives the courage to everyone else to follow.

AT: You deployed over $1 billion dollars last year into AI, BCI(brain computer interface), Bitcoin mining, as well even agriculture and food company Adecoagro. Can you say more about that? 

PA: I think that it’s important as a company to build technology and build an ecosystem that is very resilient. Tether is as also an educational company, so all these things that we are doing: artificial intelligence, we are building AI software, AI platforms and AI applications that we are going to release next few months but most importantly we are going to open source a lot of it because we want to educate people on the importance of keeping their personal information.

Everyone is giving their most private personal information to ChatGPT, and that is a cloud company that is reusing that information for their own purposes. So we are building all these tools. While they might seem scattered from the outside, they have their part of the same story: how to make people more resilient, how to make people more independent and how we can empower people.

AT: You mentioned plans to invest half of Tether’s profits this year.What are the industries you plan to invest in, and what’s your decision-making process?

PA: I prefer to invest in real-world projects like artificial intelligence, not necessarily related to crypto. Honestly, I think that there are so many opportunities in the real world and I think the success of crypto is actually in the real world.

I much prefer to focus on building, using the technological rails that we learn from, using blockchain: for example, to track food, to track land ownership and all these types of things, rather than launching memecoins. So that is where I see the biggest utility for humanity.

AT: You mentioned the launch of your AI platform, so can you tell more about this and what features can users anticipate? 

PA: I wanted to create a platform that would empower the people. So we’re going to open source soon what we call an AI SDK, a software development kit, that works on mobile phones, laptops, servers, mainframes, and allows every developer to build privacy-oriented AI and also peer-to-peer AI.

It’s basically the decentralization for AI done properly without any blockchain or scammy tokens, where every single developer can decide what to build, they will own the code, but people that run the applications can keep control over their own data. We are creating AI that can run locally on your devices to keep everything about yourself.

In 2023, there were a total of 18 reported physical attacks against people owning Bitcoin and other cryptocurrency. In 2024, there were 24 such attacks. In 2025, there were eight in January alone. That’s according to a running chronology maintained by Jameson Lopp, a famous early Bitcoiner, who in 2017 was attacked himself when criminals called in a SWAT raid of his home in a bid to extort him. The true number of overall violent crypto attacks is likely much higher than what Lopp has cited, given that some victims will be reluctant to report them.

The violence highlights a popular misperception about crypto. While thefts due to hacking are still widespread, blockchain technology—especially in the case of Bitcoin—is highly secure. The reality is, it is nearly impossible to hack someone who has taken the right precautions. But even if a criminal can’t steal crypto by means of a cyberattack, they can do so through old-fashioned physical coercion. Such attacks are made easier because the crooks don’t have to carry or transport the stolen goods, but can simply force the victim to enter a passcode and whisk their crypto fortune to an overseas wallet.

This risk of crooks using physical force to steal crypto is a long-standing concern for Lopp and others deeply enmeshed in the crypto scene. So much so that there is a common term for it: wrench attacks. The term is based on a decade-old meme, widely circulated among cybersecurity professionals, that shows crooks carrying out an expensive cyberattack only to be foiled by the laptop’s sophisticated encryption. A subsequent panel shows how the crooks plan to get around this obstacle by purchasing a $5 wrench to beat the laptop owner until he gives up the password:

This, in essence, is what befell Balland, the Ledger cofounder, whose company is known in the crypto industry for making highly secure hardware wallets. Investigators ultimately rescued Balland after first paying the crooks a single Bitcoin to buy time and then, in a lucky break, stopping a car being driven by others in the kidnap gang who had seized his wife. Since the plot was foiled, the crime saw Balland lose his finger but not his fortune—and it has also led to other crypto owners rushing to protect their crypto stash from violent criminals.

Wrench attack insurance

Becca Rubenfeld, a former longtime Starbucks executive who lives in Seattle, embarked on a decidedly different career in 2022. She cofounded AnchorWatch, a startup that helps Bitcoin owners not only store their digital assets, but insure them.

In November, Rubenfeld finally succeeded in persuading insurance giant Lloyd’s of London to include wrench attacks in the policy that AnchorWatch offers to its customers. For an annual cost starting at 0.55% of the Bitcoin they want to protect, customers can now be insured against violent Bitcoin robberies.

“Bitcoin should be insurable. Since you can transfer it on chain, it’s easy to see, and you have a better chance to recover it,” said Rubenfeld, explaining why the likes of Lloyd’s of London are willing to write policies for an asset that many once regarded as exotic or illicit.

Rubenfeld added that AnchorWatch has already sold numerous wrench attack policies and that, since the Ledger kidnapping, the company has received hundreds of inquiries. She pointed out that, as wrench attacks become more common, the victims are often not the ultrawealthy—citing the example of a husband and wife kidnapped for three days, all for around $300,000 in Bitcoin.

“This can make it seem amateurish, but it doesn’t mean it’s less dangerous,” she said.

The process of purchasing wrench attack insurance involves more than simply signing a form and paying a fee. Policyholders must also work with AnchorWatch to implement technology to secure their Bitcoin.

This includes involving AnchorWatch in a process known as multi-sig that requires multiple people sign off before a Bitcoin can be moved, and may also involve time locks. In the event, however, that a criminal nonetheless succeeds in forcing a victim to turn over their crypto, the policy will kick in with maximum compensation of $100 million.

The wrench attack policy does not include coverage against hacking, which runs closer to 3% to 4% of assets, or lossfrom insider theft.

In many ways, Bitcoin has become just another valuable asset that people pay to insure—except for one aspect. Rubenfeld explained that, in addition to the usual coverage exclusions for major events like war or acts of God, policies do not cover seizure by the government.

Meanwhile, Lopp has some commonsense advice that Bitcoin owners can take to protect themselves against violent robberies.

“In general the best things Bitcoiners can do to stay safe is to remain private. The goal should be to avoid becoming a target,” he says. “Don’t go around telling anyone about your Bitcoin holdings. Don’t flaunt your wealth online or in meatspace. Don’t engage in risk activities such as high-value face-to-face trades.”

Bitcoin plunged 8% in the 48 hours following the policy change to a low of $93,000 before rebounding on Monday. XRP and Ethereum were hit even harder by the news, falling 33% and 22% respectively before regaining some of their losses after Trump walked back part of the policy. 

The crash comes in response to a Tuesday policy deadline during which Trump’s tariffs are scheduled to take effect. The president signed executive orders imposing a 25% levy on all imported goods from Canada and Mexico. On Monday, Trump paused the implementation of tariffs on Mexico for one month after the country’s president agreed to send 10,000 troops to the border, leading cryptocurrencies to quickly rebound. 

The new policy is expected to wreak havoc on global markets and increase the price of a wide variety of imported goods. Those fears pushed investors to offload digital assets to better manage the risk in their portfolios, says Zach Pandl, head of research at crypto asset manager Grayscale. “Investors, who are controlling risk, managing portfolios and controlling volatility will reduce risk in all risky assets, including crypto,” he said. 

Political leaders in Canada and Mexico have already voiced their plans to retaliate against Trump’s policy with tariffs of their own, a tactic that could start a trade war and prolong the market’s downturn. “If the tariffs are in place for a longer period of time, the market implications are just getting started,” says Pandl. 

While the long-term effect of tariffs would be detrimental to other financial markets, Bitcoin might benefit from the policy, according to Pandl. That’s because long-term levies could potentially reduce international trade and weaken fiat currencies over time, leading investors to put their money in crypto assets instead. 

“To the extent that tariffs accelerate the fragmentation of the dollar-based global financial system, they could even increase Bitcoin adoption over the longer term,” Pandl says.

Some investors don’t expect the tariffs to last long, because they will pressure Mexico, China, and Canada to come to the negotiating table—similar to the recent situation with Colombia in which Trump imposed a 25% tariff until the country agreed to accept deportation flights. But it remains to be seen how the tariff standoff will play out. Trump was very clear on the campaign trail that they would be a hallmark of his economic policies. 

Either way the market’s postelection honeymoon seems to be over. “There were a lot of positive expectations built into the markets about Trump administration policy,” says Pandl. “And maybe not a sufficient focus on some of the negatives.”

The current Ethereum rally came after the currency fell sharply, and then began climbing on Sunday night to rise over 25% by Monday afternoon and recoup all its recent losses. The latter part of the rally was fueled in part by a tweet on X by President Donald Trump’s son Eric. Referring to the currency’s common ticker symbol along with a dollar sign, he wrote, “In my opinion, it’s a great time to add $ETH.”

Trump’s choice of words was somewhat cryptic as it is unclear whether his recommendation to “add” Ethereum was directed at investors in general, or if it also implied the digital currency should have a role in the country’s larger strategic calculations.

In recent weeks, there have been ongoing rumors that the U.S. is set to launch a strategic Bitcoin reserve and, on Monday, President Trump signed an executive action to create a sovereign wealth fund for the country. Neither the president nor senior White House officials appear to have designated Ethereum as a priority for either of these initiatives.

The Trump family, however, does have a vested interest in Ethereum in the form of World Liberty Financial, a new decentralized finance (DeFi) project backed by the president that has significant cryptocurrency holdings. A report by The Block on Monday stated that World Liberty’s treasury is primarily made up of Ethereum and a derivative version of Bitcoin.

Crypto industry sources have also stated on X that World Liberty has been accumulating Ethereum for some time:

Fortune has not independently confirmed the extent of World Liberty’s Ethereum holdings, though it is worth noting that crypto assets are far easier to trace than conventional ones thanks to the tamperproof ledger created by blockchains. The Trump Organization, which is headed by the president’s sons, did not immediately reply to a request for comment.

The February rally comes at a contentious time for Ethereum. Even though the currency has notched large gains along with the rest of the crypto market, its market cap has not grown as quickly as other major currencies like Bitcoin, XRP, and Solana. At the same time, the community of developers who oversee the blockchain’s development have been fighting over the project’s future amid claims it is lacking leadership and has failed to evolve quickly enough.

Ethereum, which is more versatile than Bitcoin thanks to smart contracts, is the brainchild of computer science genius Vitalik Buterin, who wrote a white paper outlining its key ideas in late 2013. The main blockchain then went live in 2015.

After the announcement, in which Treasury Secretary Scott Bessent said the new fund would be established within the next 12 months, Bitcoin rallied to nearly $100,000, boosted by speculation that the currency may be among the assets included in the fund. 

A sovereign wealth fund is a government-owned and operated investment vehicle used to invest in a diverse array of assets including real estate, stocks, and bonds. Its intended purpose is to make a profit and use that money for government spending.

While the president didn’t specifically indicate that digital assets would be included in the fund, Sen. Cynthia Lummis (R-Wyo.) triggered excitement by calling the announcement a “₿ig deal” in a post on X, using the Bitcoin “₿” symbol to suggest that the original cryptocurrency could somehow be involved. 

The idea of a government using this type of fund to invest in digital assets is not as far-fetched as it may seem. A number of other countries have already allocated a portion of their sovereign wealth funds to Bitcoin or other cryptocurrencies to invest in the burgeoning asset class. 

Norway operates one of the world’s largest sovereign wealth funds, managing around $1.7 trillion, according to Global SWF, a consulting firm that specializes in these kinds of investments. In 2024, the country increased its indirect Bitcoin allocation by 153% to just shy of $400 million, as reported by crypto research firm K33. 

Other countries that have invested funds in digital assets include the United Arab Emirates and Singapore.

The announcement of a sovereign wealth fund follows a crypto-specific executive order signed last month that tasks a group of high-ranking government officials with evaluating the potential for a national reserve for digital assets, which would similarly involve using government funds to buy crypto to hold over a long period of time.

Some argue that a sovereign wealth fund is a better way for the government to invest in crypto. “I believe a United States sovereign wealth fund is the perfect vehicle for bitcoin ownership outright and investment in bitcoin infrastructure,” Nik Bhatia, an adjunct professor of finance and business economics at the University of Southern California, wrote on X. 

However, government-funded crypto investments could prove to be an extremely risky way to use taxpayer money because of the volatile nature of assets like Bitcoin, which have been known to lose or gain thousands of dollars within just a few hours.

Furthermore, David Sirota, founder of investigative journalism outlet The Lever, pointed out that any type of government investment in crypto is antithetical to the technology’s original libertarian ethos. 

“There’s a tension between ‘crypto is the way we free fiat money from government!’ and ‘government must now be forced to invest in muh crypto,’” he wrote on X. 

One company that launched when the sector was hot four years ago is raising money, in part, by reinventing itself and building out its bridge technology. On Wednesday, Union Square Ventures announced it is leading a $14 million round into Reservoir, an NFT company that launched its bridge protocol last year. 

Other investors in this round include Framework Ventures, Variant and Coinbase Ventures.

In an interview with Fortune, Reservoir CEO Peter Watts said that while the company’s origins are “very much in NFTs,” he has decided to change the company’s trajectory in lieu of the public’s shifting interests.

“We need to solve payments first, and then you can build an economy around on-chain payments,” Watts said. “In some ways, we tried to do it in the wrong order and it blew up, but I don’t think that means that NFTs are just fundamentally not going to work.”

Reservoir offers a suite of products including an NFT marketplace and a decentralized exchange that helps convert one token into another. In a bid to make to it easier for holders to trade cryptocurrencies and NFTs across multiple chains at once, Reservoir launched Relay last year.

Relay is a payments solution known as a bridge that helps two non-compatible blockchains communicate with each other. In exchange for a fee, a financial agent acts on behalf of the Relay user to execute the transaction and swap their tokens. Relay currently serves around 50,000 daily users, according to Watts. 

There are plenty of other blockchain bridges, including Across and deBridge that Watts says compete with Relay. Watts says Relay differs because, instead of focusing on just a handful of blockchains, his system strives to support as many as possible. He also says that, unlike other bridges, his company is “vertically integrated,” offering other services in addition to Relay. 

Reservoir produces revenue by charging a transaction fee on Relay and allowing blockchains to integrate its NFT and token swapping infrastructure. Watts declined to disclose the company’s annual revenue and overall valuation.

The CEO said he plans to use the funding raised in this round to expand his team and roll out new products to serve growing sectors like stablecoins. 

Founded by Bitcoin advocate Michael Saylor, the company announced Wednesday that it will now be called Strategy and described itself as “the world’s first and largest Bitcoin Treasury Company.” Since 2020, the organization has accumulated more than $45 billion worth of Bitcoin, making it the single largest corporate Bitcoin holder. 

“Strategy is one of the most powerful and positive words in the human language,” Saylor, the company’s executive chairman, said in a statement. “It also represents a simplification of our company name to its most important, strategic core.” 

The rebrand also includes the adoption of the Bitcoin “₿” symbol as the company’s new logo, as well as a color scheme change. The company will now use bright orange, which it says represents “energy, intelligence, and Bitcoin.” The changes come as the organization released its fourth-quarter earnings on Wednesday, reporting a net loss of $671 million and a 3% slide in revenue. 

MicroStrategy began investing in Bitcoin in 2020, under the guidance of Saylor, tapping capital markets—selling additional shares in the company and issuing convertible debt—to raise enough money to make consistent purchases of the original cryptocurrency. The company has accelerated the rate of these acquisitions in recent months. The company now holds more than 471,000 Bitcoins, or over 2% of the total supply of 21 million.

Because of this, the company’s stock has become a kind of proxy for Bitcoin, attracting investors who want access to the digital asset’s price movements without the complexities and volatility involved with holding the currency directly. 

This tactic has proved to be extremely lucrative for the company, which has seen major growth in the past year. The company’s stock price is up 565% in 12 months, partly driven by Bitcoin’s recent bull run in which the currency reached a new all-time high of $109,000. Last month, the company was included in the tech-heavy Nasdaq-100 index for the first time.

The company said Wednesday it had a fourth-quarter net loss of $670.8 million partly owing to a $1 billion impairment charge against its $46 billion in Bitcoin holdings. The charge reflects the total dollar amount the company’s Bitcoin holdings decreased throughout the quarter, as a result of Bitcoin’s volatile price fluctuations. 

Strategy said its revenue fell 3% to $120.7 million.

“Digital asset impairment charges in Q4 were approximately $1 billion,” Strategy CFO Andrew Kang, said on the earnings call with shareholders. “I am happy to announce that Q4 will be the last quarter where we will recognize an impairment charge on our Bitcoin holdings as we move to fair value accounting in Q1.”

The company’s stock fell nearly 4% on Thursday, to $323. 

The impairment charge is the result of an old accounting rule that required a company to report a quarterly decrease in value for its digital asset holdings but prohibited it from recording any increase in value during the same period. 

The rule was changed in 2023 and took effect in late 2024, benefiting companies like Tesla, which was able to report a $600 million boost in profits by reporting the fair value of its Bitcoin holdings last quarter. However, Strategy has chosen to hold off on taking advantage of the new rule until Q1 of 2025, because reporting those unrealized gains—increases in the value of an asset that has not yet been sold—would result in a massive taxable event. 

As part of the Inflation Reduction Act of 2022, the corporate alternative minimum tax was introduced, forcing companies to pay a 15% tax on adjusted financial statement income. For Strategy, which plans to report the cumulative net increase of its Bitcoin holdings in Q1 plus $12.7 billion worth of retained earnings, this could equate to a multibillion-dollar tax.

However, Strategy may be able to avoid the tax altogether. The company’s cofounder and executive chairman, Michael Saylor, said on Wednesday’s earnings call that he is working with the Internal Revenue Service and pro-crypto lawmakers to get an exemption from this tax rule, as other companies like Berkshire Hathaway already have. 

“We don’t think that there’s any broad-based support for the idea of an unrealized capital gains tax on crypto assets for large corporate holders, so we don’t expect over time that this will come to much,” he said. 

Either way, Saylor said, the company plans to keep adding to its Bitcoin stockpile—which currently stands at more than 471,100 coins or over 2% of the total 21 million supply. The company will continue to issue shares and “innovative fixed-income securities” to raise enough capital to buy more Bitcoin and reach his target of generating $10 billion worth of gains this year, he said. 

Also on Wednesday, the company announced it would change its name from MicroStrategy. It will now be Strategy, and has adopted the Bitcoin “₿” symbol as its logo to reflect the company’s pivot to crypto, 35 years after initially focusing on software.