Twenty One Capital Launches Bitcoin Treasury to Rival Michael Saylor's Strategy

Twenty One Capital, a new Bitcoin treasury company led by Strike founder Jack Mallers with the support of Tether, SoftBank and Cantor Fitzgerald, is looking to supplant

Twenty One Capital, a new treasury company backed by Tether, SoftBank and Cantor Fitzgerald, is planning to launch with 42,000 Bitcoin (BTC) and is aiming to supplant Michael Saylor’s Strategy (NYSE:STR) as the “superior vehicle for investors seeking capital-efficient Bitcoin exposure.”

It will be launching with around 23,950 BTC from Tether, 10,500 BTC from Softbank and 7,000 BTC from Bitfinex, which will be converted into equity at $10 per share, according to an April 23 statement.

The firm is planning to go public via a blank-check merger with Cantor Equity Partners (NYSE:CEP) and will trade under the ticker XXI on the Nasdaq. It is also planning to raise $585 million from investors through convertible bonds and equity financing.

“Our mission is simple: to become the most successful company in Bitcoin, the most valuable financial opportunity of our time. We’re not here to beat the market, we’re here to build a new one,” said Jack Mallers, the founder and CEO of Bitcoin payments-focused firm Strike and the new CEO of Twenty One.

In an investor presentation to the US Securities and Exchange Commission, Twenty One compared its business model to Strategy’s, claiming it is potentially a “superior vehicle for investors.”

It claimed that Strategy’s ability to create shareholder value through future Bitcoin purchases will be limited because the firm — which holds 534,741 BTC — would need to make even larger investments to increase its Bitcoin Per Share, or BPS, thus diminishing the per-share dollar impact of future capital deployments.

“As Star performs future capital deployments to buy additional Bitcoin, the incremental BPS impact of each dollar of capital deployed will diminish with each round of capital. This is because to achieve each 1.0x increment in BPS, Star will need to invest roughly $2.0 billion to $2.5 billion.”

Instead, Twenty One highlighted its ability to perform follow-on offerings at a cost of $5.0 to $7.5 billion to raise capital for future Bitcoin purchases.

It added that Strategy investors would be taxed on any capital gains realized on their shares at rates of 20% to 23.8%, while investors in Twenty One would pay a lower rate of 15% on any capital gains realized from the sale of its shares or convertible bonds.

Further, it stated that Strategy investors are limited in their ability to diversify their holdings due to the small size of other publicly-listed Bitcoin companies.

But Twenty One said it would be a more “pure play” for investors seeking Bitcoin exposure with Bitcoin-native operations and more “flexibility” for strategic capital raises.

A launch of 42,000 Bitcoin would make Twenty One the third-largest corporate Bitcoin holder, putting it behind only Strategy and Bitcoin mining firm MARA Holdings (NASDAQ:MARA), which holds 47,600 BTC, according to BitcoinTreasuries.NET data.

Twenty One also plans to do more than just stack Bitcoin. The firm also intends to build out several Bitcoin-focused offerings, including Bitcoin debt and equity products, an advisory service, a lending platform and an educational platform.

“Twenty One’s mission will be to accelerate Bitcoin adoption and Bitcoin literacy at both institutional and retail levels,” the firm said.

It will also partner with industry players to host Bitcoin conferences.

The news sparked a massive 54.2% price rally in Cantor Equity Partners (NYSE:CEP) shares to $16.50 on April 23 and has risen another 25.1% in after-hours, Google Finance data shows. CEP will convert to XXI once the $585 million agreement is completed.

The venture strengthens Tether’s ties with Cantor, which manages the US Treasury reserves backing Tether’s USDT, which boasts a market cap of $145.3 billion. Cantor also owns a 5% stake in the stablecoin issuer.

Twenty One will be majority-owned by Tether and crypto exchange Bitfinex, while Japanese investment holding firm SoftBank will own a “significant” minority share.