Cantor Fitzgerald, Tether, and SoftBank have launched Twenty One Capital, a bitcoin vehicle for institutional investors, via a merger with Cantor Equity Partners at a $3.6 billion value. Twenty One will start with 42,000 BTC, making it the third-largest bitcoin corporate holder. The firm aims to innovate financial products tied to bitcoin while securing financing of $585 million for future acquisitions.
Cantor Fitzgerald, Tether, and SoftBank Group have partnered to establish Twenty One Capital, a bitcoin accumulation vehicle aimed at institutional investors on Wall Street. This initiative will be made public through a merger with Cantor Equity Partners (CEP), a special purpose acquisition company (SPAC) affiliated with Cantor, boasting a pro-forma enterprise value of $3.6 billion. Billionaire Howard Lutnick, who has led Cantor for nearly 40 years, is now the U.S. Secretary of Commerce, while his son Brandon, aged 27, currently manages the firm. Tether and its exchange Bitfinex will hold a majority stake, while SoftBank will maintain a significant minority interest. Jack Mallers, founder of the bitcoin payments firm Strike, is appointed as CEO.
Twenty One Capital will commence operations with approximately 42,000 bitcoins, valued at $3.6 billion based on a 10-day average price of $84,864. The bitcoins will be sourced from contributions and cash commitments from Tether, Bitfinex, and SoftBank, totalling $1.5 billion, $600 million, and $900 million, respectively, in exchange for equity stakes. Consequently, Twenty One will rank as the third-largest corporate holder of bitcoin, trailing only MicroStrategy with 538,200 BTC and mining company Marathon Digital with 47,531 BTC.
To facilitate further acquisitions, Twenty One has secured $585 million in financing, including $385 million in convertible senior secured notes priced at $13 per share, alongside a $200 million private investment in public equity (PIPE) priced at $10 per share. Tether will purchase bitcoin that corresponds to net proceeds from these sales after fees, within ten business days of the closing. If investors opt to increase their notes, Tether will buy additional bitcoin. At the transaction’s closure, proceeds from the PIPE will be used to acquire bitcoin from Tether at cost.
Twenty One Capital’s business model mirrors that of Nasdaq-listed MicroStrategy, which transitioned from software to a bitcoin investment powerhouse under CEO Michael Saylor. Employing strategic financial engineering, MicroStrategy achieves a market cap of $91 billion, almost double the value of its bitcoin holdings. Twenty One aims to attract investors through two custom metrics: Bitcoin Per Share (BPS), representing the cryptocurrencies per fully diluted share, and Bitcoin Return Rate (BRR), which gauges BPS growth. However, these metrics do not provide concrete return rates for investors. The company’s press release outlines its ambition to create a system supporting financial products revolving around bitcoin.
Cantor Equity Partners shares will continue trading on Nasdaq under the ticker symbol “CEP” until the completion of this transaction. Following the merger, Twenty One aims to trade under the ticker symbol “XXI.”
