On a patient public-equity position in Bitcoin Depot
A 17.2% stake in the largest U.S. operator of Bitcoin ATMs, taken at the listed-equity layer rather than the protocol layer, and disclosed where the law required.
In April of 2024, the firm acquired 2,906,976 Class A shares of Bitcoin Depot, the publicly listed U.S. kiosk operator, for $5.0M. In August, an SEC Form SC 13G filed by Andy Paul disclosed the resulting holding at 17.2% of the company’s Class A common stock outstanding as of August 12, 2024.
Daniel Wedman, who leads Special Situations, structured the position. His route to it was unconventional by the standards of the asset class. The Bitcoin universe is, by reflex, oriented toward the protocol — toward holding the underlying, mining the underlying, building exposure to the underlying. Sopris’s interest is one layer above that. Bitcoin Depot is a hardware-and-cash-handling business with a fee model, a balance sheet, and a public ticker. It earns money whether the price of Bitcoin moves or not.
It is an ownership stake in the physical infrastructure that lets people use one.Daniel Wedman
What the firm acquired, in other words, is not a directional view on a digital asset. It is an ownership stake in the physical infrastructure that lets people use one.
The position was taken slowly, on the open market, and disclosed in the ordinary course. Sopris does not run leverage against it, does not have a target sale price, and does not maintain a public view on what Bitcoin will or will not do in any given year. The investment thesis is simply that the company will continue to be the largest operator in its category, and that the firm’s seat as the largest reported holder of its Class A equity is a fair reflection of that conviction.