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What to Do if You Inherit $150 Million in Bitcoin?

News that the CME Group is launching a tradable bitcoin contract could drive the price of the cryptocurrency higher.

Being a cryptocurrency with no official backing, SoftBank valued the bitcoin at zero when it ran numbers on the deal, according to a person familiar with the deal.

But actually, that $5.9 million was just the value Fortress carried it on its books, having written down its initial investment in the digital ducats following bitcoin crashes in 2014 and 2015. As of February, when SoftBank agreed to buy Fortress, the company’s bitcoin was actually worth about $22 million, based on bitcoin’s market price and Fortress financial filings. Softbank’s discovery should not be surprising. Fortress co-chairman Peter Briger is a well-known Bitcoin enthusiast, as is former Fortress macro fund manager Michael Novogratz.

Since announcing the deal, Bitcoin has risen 551%, to nearly $6,600 per bitcoin, making Fortress’s stake worth at least $142 million. Add in the value of “bitcoin cash,” a so-called forked offshoot that was distributed to bitcoin holders in August, and the value goes above $150 million. SoftBank’s Fortress deal should close by first week in December, according to the person familiar with the matter, which means SoftBank will soon have to decide what to do with the free money.

It won’t necessarily unload the sum immediately. News that the CME Group is launching a tradable bitcoin contract could drive the price higher, especially if exchange-traded funds based on the contract develop and a new herd of crypto maniacs step in. Of course, with a CME-traded contract, bitcoin will be more easily shorted, too. Maybe it is better for SoftBank to take at least some of its found bitcoin off the table.


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