Tether buys $459M Bitcoin for Twenty One Capital

Tether, the stablecoin issuer, recently made a significant investment in Bitcoin on behalf of Twenty One Capital, a Bitcoin investment firm it backs. This investment involved the purchase of 4,812.2 Bitcoin (BTC) at $95,319 each, totaling $458.7 million. The Bitcoin was transferred to an escrow wallet on May 9th, as disclosed in a May 13th SEC filing by Cantor Equity Partners, the firm facilitating Twenty One’s upcoming SPAC merger.

This acquisition brings Twenty One’s total Bitcoin holdings to 36,312 BTC, solidifying its position as the third-largest corporate Bitcoin holder, trailing only MicroStrategy and Marathon Digital Holdings. Cantor Equity Partners currently holds 31,500 BTC on behalf of Twenty One, which will trade under the ticker XXI post-merger. While the merger approval process is underway, a completion date remains unannounced.

Twenty One’s ambitious strategy aims to surpass MicroStrategy as the leading vehicle for investors seeking efficient Bitcoin exposure. The firm differentiates itself by focusing on Bitcoin-native operations and flexible capital raising strategies. Instead of traditional earnings per share (EPS), Twenty One prioritizes Bitcoin per share as its key performance indicator, emphasizing Bitcoin acquisition over profit generation. Their target is to accumulate 42,000 BTC before launch, with anticipated contributions from Tether (23,950 BTC), SoftBank (10,500 BTC), and Bitfinex (approximately 7,000 BTC).

The financial backing for Twenty One is substantial, with Cantor Fitzgerald providing financial advisory services and securing $585 million in funding, alongside SoftBank’s $900 million investment. Tether and Bitfinex are also majority stakeholders, highlighting the significant industry support behind this venture. The SPAC merger with Cantor Equity Partners has significantly impacted the latter’s share price, experiencing a dramatic increase initially followed by a correction. Twenty One’s strategy, along with the considerable investment from major players in the crypto and finance sectors, signals a significant shift in the corporate landscape of Bitcoin investment.