Twenty One Capital - Institutions Accumulating $BTC?
$BTC Safe Haven Asset, Gold Correlation, & More
Right around two weeks ago, $BTC began trading more in line with Gold rather than equities. A sufficient amount of time has passed, making it hard to shrug this correlation off. Traditionally, there has been a lot of overlap between the buyers of $BTC and MAG7 tech stocks, mostly retail. Right now, there is more overlap between the buyers of Gold and $BTC, likely large institutions.
Current market conditions make equities less attractive than things like Gold or even $BTC, even while the S&P500 has bounced back above the $5K level. Prior to the Trump tariff debacle, one of the biggest success stories in markets was MicroStrategy (now known as Strategy). While Nvidia and other MA7 stocks were able to capitalize on the AI investment frenzy, the mechanics behind Strategy’s $MSTR are much simpler. The company is able to issue a mix of stock and convertible bonds, using the proceeds to buy $BTC.
In today’s edition, we’ll discuss Twenty One Capital, a new venture aiming to mimic the success of Strategy but with key backers including Cantor Fitzgerald, Tether, Bitfinex, and SoftBank…
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Background on Twenty One Capital
Twenty One Capital is officially being launched by Cantor Fitzgerald, an established global investment bank. Unlike Strategy, which was publicly listed for decades prior to its pivot to $BTC, Twenty One Capital is a new entity that will be going public via a $3.6 billion SPAC merger with Cantor Equity Partners ($CEP). Beyond the existing capital, the group plans to raise an additional $585M.
Twenty One Capital has already launched with 42,000 BTC in assets, roughly $4B at current market price. From launch, this immediately positions the company as one of the largest corporate holders of $BTC, going head to head with Strategy. The mechanic behind Twenty One is roughly the same with the advantage of starting out small with future raises benefiting existing shareholders, which is harder to achieve with Strategy.
The Twenty One Capital announcement signals the arrival of another major publicly traded company explicitly focused on Bitcoin. Currently, Coinbase’s $COIN serves that role, though a lot of Coinbase’s business model has evolved to become dependent on auxiliary services detached from the stability of $BTC. Circle’s IPO filings have been delayed, and this public offering also would provide more isolated exposure to stablecoins. This creates a limited opportunity for other companies to come in and iterate upon the original MicroStrategy model
Vehicles like $MSTR and Twenty One Capital can make it easier for large institutions to get exposure to $BTC. These buying programs also legitimize the concept of purchasing $BTC for large allocators, ‘if they can, why can’t we?’. This notion becomes more important for getting capital outside of the U.S. to become more receptive to $BTC.
SoftBank’s role in Twenty One Capital also can’t be understated, considering it is one of the largest companies in the country of Japan and has a front seat to some of the most groundbreaking innovations worldwide. This isn’t an understatement, considering SoftBank’s early investments in Nvidia, WeWork, and other prominent tech companies, led by Founder Masayoshi Son.
Pairing Masayoshi and $BTC together seems like a perfect fit, as Masayoshi’s own history suggests he has no qualms with betting big on transformative narratives. SoftBank’s blessing of Twenty One Capital in conjunction with the asset’s recent correlation with Gold could prompt other investors in Japan or other markets to rethink their position on $BTC.
There is room for existing $BTC ETFs in Hong Kong to be opened up to the broader Chinese mainland market. This is already starting to play out, with HK Asia Holdings planning to ~$8M to purchase $BTC. While small, this is a start for increased institutional adoption of $BTC as a store of value asset…
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