On May 13, 2024, Twenty One Capital, supported by Tether, acquired 4,812 Bitcoin
$
105,140 worth approximately $458.7 million as per a filing with the U.S. Securities and Exchange Commission (SEC). This acquisition is a part of the firm’s Special Purpose Acquisition Company (SPAC) merger with Cantor Equity Partners. The purchasing coincided with significant fluctuations in Bitcoin’s price, trading around $103,540 at the time.
SPAC Merger Acquisition and Strategic Goals
The acquisition was executed by stablecoin provider Tether, where Bitcoin on May 9 was moved to an escrow wallet and subsequently transferred to a wallet controlled by Tether. For $458.7 million, these Bitcoins will be sold to the publicly owned Twenty One Capital as part of their SPAC merger and Private Investment in Public Equity (PIPE) arrangements.
Post-merger, the company’s stock symbol will turn into XXI, with current trading under CEP. This SPAC structure is backed by Wall Street firm Cantor Fitzgerald. Post-acquisition, the company’s total Bitcoin holdings rose to 36,312, of which 31,500 are held on behalf of Cantor Equity Partners.
Management, Partnerships, and Strategic Outlook
Led by Jack Mallers, known as the founder of the Bitcoin payment app Strike, Twenty One Capital adopts a strategy akin to MicroStrategy, focused on building a Bitcoin-centric portfolio. The company’s statement to the SEC highlights its aim to offer a capital-efficient Bitcoin investment tool.
Tether and Bitfinex are majority stakeholders in the company while Japanese investment group SoftBank emerges as a minority stakeholder with a $900 million investment. Cantor Fitzgerald is both the merger sponsor and advisor, having established a $585 million fund for future Bitcoin acquisitions.
The company aims to increase its total Bitcoin holdings to 42,000 post-IPO, acquiring 23,950 from Tether, 10,500 from SoftBank, and 7,000 from Bitfinex. These assets will be converted into equity stakes at $10 per share.
Market Reactions and Other Players
The Bitcoin acquisition news caused significant fluctuations in Cantor Equity Partners (CEP) shares, which surged to $59.73 from $10.65 on May 2, later settling at $29.84. Recent filings saw the stock gain a 5.2% increase in after-hours trading.
Data from BitcoinTreasuries.net shows that Twenty One Capital is now the third-largest institutional Bitcoin holder, following MicroStrategy and MARA Holdings. The firm evaluates performance based on Bitcoin per share, while other players like Japan’s Metaplanet are also bolstering their cryptocurrency holdings.
Bitcoin’s Price Volatility and Analyst Insights
The new acquisition aligns with Bitcoin’s price nearing $103,540, as the strong market uptrend has led it close to its previous peak. Analysts closely monitor if the price will ascend to a higher level.
Market analyst Michaël van de Poppe suggests that following lower-than-expected inflation in the U.S., the FED might reduce interest rates, potentially creating a favorable environment for cryptocurrencies. Another analyst, ColinTCrypto, noted BTC’s correlation with money supply, predicting a similar upward trajectory seen in the year’s first half, with prices possibly exceeding $120,000 shortly.
The recent acquisition by Twenty One Capital highlights growing institutional interest in cryptocurrencies. Developments ahead of the company’s IPO, including its expanding Bitcoin portfolio, are keenly observed within the crypto market. The company’s performance metrics, focusing on Bitcoin per share rather than traditional methods, suggest a new industry approach. Multiple large investors adopting similar strategies contribute to increased institutional activity in cryptocurrencies, with market analysts considering both macroeconomic data and institutional moves to forecast potentially new record levels.
