A $3.6 billion Bitcoin venture named Twenty One Capital has been launched by Tether, SoftBank, and Cantor Fitzgerald. Jack Mallers from Strike will be the CEO, positioning the company to rival MicroStrategy’s approach. The firm has begun with 42,000 bitcoins and aims to facilitate corporate Bitcoin investments using innovative metrics. However, concerns arise surrounding the companies involved and their past controversies.
In a significant development, a consortium comprising Tether, SoftBank, and Cantor Fitzgerald has launched Twenty One Capital, a new Bitcoin accumulation venture valued at $3.6 billion. The company, which will be spearheaded by Strike CEO Jack Mallers, has ambitions to challenge established players like MicroStrategy and its founder Michael Saylor. Twenty One Capital is on track to go public through a SPAC merger with Cantor Equity Partners.
Twenty One Capital starts with a substantial asset pool of 42,000 bitcoins. Notably, Japanese tech titan SoftBank contributes $900 million for a minority stake, while Tether adds around $1.5 billion to the firm’s treasury. This new entity plans to facilitate corporate engagement with Bitcoin investments, steering clear of conventional crypto ETFs. They aim to innovate their metrics, introducing measures like “Bitcoins Per Share (BPS)” and “Bitcoin Return Rate (BRR).”
Presently trading as CEP, the company anticipates a rebranding to the ticker XXI soon. With a bold bitcoin acquisition, Twenty One Capital swiftly positions itself as a strong contender in corporate Bitcoin strategy. In a recent interview, Mallers outlined aggressive capital-raising plans and emphasised the company’s goal to ensure shareholder wealth growth in Bitcoin terms, focusing on blending Bitcoin into traditional finance for a robust market impact.
This approach has sparked considerable interest, especially since Twenty One Capital aligns itself with Saylor’s playbook, promising a formidable competitor. However, the affiliations among the key players in the consortium are raising eyebrows within the crypto community. Some are skeptical about yet another entity facilitating Bitcoin ownership while not allowing direct ownership, a model some feel could be problematic.
The consortium’s power dynamics cannot be overlooked. SoftBank, for instance, faced scrutiny for anti-monopoly violations in 2021 and has a history of mixed investment successes. Meanwhile, Tether has long weathered allegations regarding Bitcoin price manipulation and scrutiny over its auditing practices. The chair of Cantor Fitzgerald, Brandon Lutnick, is notably connected, being the son of a U.S. Secretary of Commerce.
One voice in this conversation is Jeff Park from Bitwise Invest, who recently referred to Twenty One Capital as an “ultimate exorbitant privilege joint venture” whilst hinting at its potential to create a positive feedback loop in dollar exports. This is intriguing; with Tether’s links to U.S. financial officials and its significant USDT holdings, there’s speculation it might influence dollar valuation, potentially impacting international trade dynamics negatively.
Looking at SoftBank’s investment history gives rise to questions. Founder Masayoshi Son has had his share of ups and downs, most infamously losing $70 billion during the dot-com collapse in the early 2000s, despite some wins like his Alibaba investment. Disappointing bets like those on WeWork and his losses on Bitcoin during the 2017 peak add layers of uncertainty to this new venture.
Tether’s situation is equally complex. As the largest stablecoin, USDT enjoys considerable market clout but faces its own regulatory mountains. Recently, it had to exit the European market under MiCA law, raising concerns about its future in the U.S. Given these challenges, Tether’s stake in Twenty One Capital could be a strategic move to diversify, especially as it embarks on a project addressing electricity issues in Africa.
In summary, with Twenty One Capital entering the scene, the landscape could shift significantly, posing new challenges for Saylor’s operation. As this new player charts its path, the ripple effects on both the crypto sector and global financial systems could be profound. Stay tuned as developments unfold in this intricate saga.
