The world of digital currencies is experiencing a significant shift, with Bitcoin, the leading cryptocurrency, making waves in the financial sector. This surge in interest can be traced back to the political landscape, specifically the return of Donald Trump to power in 2024.
His promise of less stringent regulations for digital currencies has sparked a renewed interest in Bitcoin and other cryptocurrencies. One company that has capitalized on this trend is MicroStrategy, led by Michael Saylor.
MicroStrategy had great success buying Bitcoin during previous surges. Now, a top Wall Street firm is joining hands with the leaders of the crypto world to ride this latest wave of excitement.
New Venture on the Horizon
Now, a prominent Wall Street firm is aligning itself with the leaders of the crypto world to ride this wave of enthusiasm. In a recent development, brokerage firm Cantor Fitzgerald announced its collaboration with Tether, the company behind the world's largest stablecoin, and Japan's SoftBank Group. This partnership aims to establish a new venture, Twenty One Capital, which will focus on Bitcoin acquisition. The transaction will be completed through a merger with Cantor's blank-check company, Cantor Equity Partners.
Upon completion, Twenty One Capital will possess over 42,000 bitcoins, making it the third-largest Bitcoin treasury in the world. With the current Bitcoin price hovering around $85,000, the new company's valuation stands at approximately $3.6 billion. Following the merger, Twenty One Capital will be listed on the Nasdaq stock exchange under the ticker symbol XXI.
Investment and Ownership
Jack Mallers, the CEO and co-founder of Twenty One Capital, has expressed that the venture's objective extends beyond merely outperforming markets. He envisions it as a new kind of investment opportunity, stating, A public stock, built by Bitcoiners, for Bitcoiners.
Tether will be the primary sponsor of this initiative, investing around $1.6 billion worth of Bitcoin. Bitfinex, a crypto exchange associated with Tether, will contribute $600 million, while SoftBank will add another $900 million. The companies also plan to raise an additional $585 million through convertible bonds and stock sales.
In terms of ownership, SoftBank will hold a smaller stake in the new venture, while the majority will be owned by Tether and the crypto exchange Bitfinex. Tether and Cantor Fitzgerald, a large Wall Street firm, have maintained a strong relationship over the years. Cantor Fitzgerald holds a significant portion of the U.S. Treasury funds that Tether has used to back its USDT stablecoin.
Bitcoin as a Safe Asset
Bitcoin, currently trading at $93,780, is increasingly being perceived as a safe asset in times of uncertainty. Over the last six months, the cryptocurrency has seen a gain of more than 40%, despite experiencing turbulence during the recent trade war. While gold remains a preferred option for many, its prices have recently soared to record highs.
While SoftBank will own a smaller part in the new venture, Twenty One Capital will be majorly owned by the crypto company Tether and the crypto exchange Bitfinex. Tether and Cantor have maintained a good relationship for a long time. Cantor Fitzgerald, a large Wall Street firm, holds a large part of the U.S. Treasury funds that Tether has used to support its USDT stablecoin.
