MicroStrategy 2.0:- Bitcoin’s significance as a strategic asset has grown significantly

Today only it surpassed Google’s market cap to become the fifth-largest asset with $1.862 trillion in market value.

In a move that could create a competitor to MicroStrategy, a son of US Commerce Secretary Howard Lutnick has partnered with Tether, Bitfinex and SoftBank to form a SPAC firm that will hold bitcoin.

Brandon Lutnick, the chairman of Cantor Fitzgerald, LP, is having a SPAC vehicle sponsored by Cantor and Cantor Equity Partners to acquire bitcoin. The firm, called 21 Capital, is aiming to merge with a SPAC later this year.

The investment banking firm has formed a black check company, Cantor Equity Partners, to drive the operations of this new crypto venture.

As reported by the Financial Times, 21 Capital has already raised $200 million in January and plans to receive $3 billion in bitcoin from its partners. The trio consortium of its partners includes Tether and Bitfinex, SoftBank. Each will contribute:

• $1.5 billion of BTC – Tether

• $900 million of BTC – SoftBank

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A new SPAC is being created by a son of US Commerce Secretary Howard Lutnick to acquire bitcoin, in a move that could create a competitor to MicroStrategy.

Brandon Lutnick, the chairman of Cantor Fitzgerald, LP, is having a SPAC vehicle sponsored by Cantor and Cantor Equity Partners to acquire bitcoin and merge with a SPAC later this year, according to three people with knowledge of the matter. The investment banking firm has formed a black check company, Cantor Equity Partners, to drive the operations of this new crypto venture.

The firm is aiming to raise $200 million in January and plans to receive $3 billion in bitcoin from its partners, according to the report by the Financial Times. The trio consortium of its partners includes Tether and Bitfinex, SoftBank. Each will contribute:

• $1.5 billion of BTC – Tether

• $900 million of BTC – SoftBank

• $600 million of BTC – Bitfinex

On Tuesday, Bitcoin Price surpassed $91,000 – for the first time since March 2. Going by its current price, the number of Bitcoins 21 Capital will see in contributions will be roughly around;

1. Tether: $1.5 billion / $91,000 = 16,484 BTC

2. SoftBank: $900 million / $91,000 = 9,890 BTC

3. Bitfinex: $600 million / $91,000 = 6,593 BTC

Once merged, 21 Capital will convert its bitcoin holdings into publicly traded shares priced at $10 each. In the share-issuance calculation, it will value Bitcoin at $85,000 per coin for public investors.

According to 21 Capital, this will lower the barrier to large-scale bitcoin exposure without direct crypto custody unlike MicoStrategy. Its share-pricing formula does highlight the vehicle’s bullish long-term outlook on bitcoin’s price trajectory.

Can it Become MicroStrategy 2.0

Lutnick’s investment vehicle, 21 Capital, has been dubbed as “MicroStrategy 2.0”. This is because of its aim to replicate MicroStrategy’s treasury-bitcoin accumulation strategy at institutional scale.

The enterprise-software company, helmed by CEO Michael Saylor, pivoted to bitcoin in 2020 and has since raised capital via debt and equity to amass over 528,000 bitcoins at an average cost of $66,385 each.

21 Capital seeks to replicate and scale this playbook. It aims to use convertible bonds and private-placement equity alongside its SPAC proceeds. As per the information available, it is expecting to raise $350 million in convertible bonds and a separate $200 million private equity for its BTC purchase.

However, this is mirroring MicroStrategy’s own ‘21/21 Plan’. It targets $42 billion in combined equity and fixed-income raises over three years. On the surface, ‘Strategy’ of both the firms may appear the same, but in the long term, it is the execution that will determine its fate.

21 Capital’s Mammoth Task – Market Volatility

Executing bitcoin acquisition strategy on a large-scale comes with certain financial risks. Despite booming Bitcoin gains, MicoStrategy has reported four consecutive quarterly net losses, including a $1.17 billion loss in fiscal 2024.

Though its bold strategy has earned the firm NASDAQ-100 inclusion, success of such firms is subject to market volatility.

There’s a growing spree in the development of such firms. Recently, Kraken Executives acquired Janover to push their acquisition strategy but for Solana.

Thus, the fortune of 21 Capital will