(Bloomberg) – When Michael Saylor transformed the longtime software company into a Bitcoin Juggernaut in 2020, he pulled away one of the most successful corporate pivots in recent memory by weaponizing the purest power of the capital market.
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Now, Cantor Fitzgerald is supported by the muscles of the institution – seeks to replicate Saylor’s success with even greater ambitions.
Along with Stablecoin Heavyweight Tether Holdings SA and SoftBank Group, Twenty One Capital’s new digital asset venture has established itself as the next generation of Bitcoin “Pure Play.” Now, like previous micro-tactics renamed the strategy, Twenty One accumulates digital tokens and raises capital to invest in related products and infrastructure. However, unlike the strategy, it has also been launched with a deep pocket partner and a larger Bitcoin retention from Get-go.
Given the secrets of their supporters, the new Cantor-related entities stand out from previous imitators, including an obscure penny stock. If the strategy is a highly volatile inventory with Bitcoin’s Treasury, Twenty One is pitching itself as a fully-running operator, including revenue-raising plans, ideas for products revolving around Bitcoin.
“We are pleased to announce that Strahinja Savic, Head of Data and Analytics at FRNT Financial,” said: “This is the only entity that was intentionally created to acquire Bitcoin on purpose by leveraging capital markets available to publicly traded companies.”
Unlike a strategy that pursued Bitcoin ambitions, as many people on Wall Street have come to ask, Twenty One was published via SPAC, but launched with about $4 billion worth of Bitcoin, making it the third largest treasure trove of Bitcoin.
The basis for many of the proposed efforts has already been introduced. Cantor, a financial services company previously led by US Secretary of Commerce Howard Lutnick, recently launched the Bitcoin finance business. Cantor helps in managing Tether’s reserves and holds convertible bonds issued by Stablecoin operators.
“There’s the support of large, influential players within the crypto space. This allows companies to leverage those companies’ resources, as well as create a much larger splash in the market otherwise.”
Success is not guaranteed. Under Jack Mullers’ leadership, 21 people must convince market participants that it is far more than just another encryption in order to raise capital at a competitive price. Meanwhile, life is getting tougher for crypto issuers looking to raise funds in the world of convertible debt. Twenty-one representatives did not respond to requests for comment.
Saylor sees his new rival as a testament to his long-standing mission to persuade executive offices across the United States to maximize the digital assets of their balance sheets.
“It’s auspicious,” Saylor said on the sidelines at a meeting held in New York in April, following the announcement of the 20 people. “It’s good for the industry as a whole because it creates a positive awareness of opportunities. And it’s very legal to see these companies investing heavily. I hope there are 10 more people.”
In fact, there are at least 30 publicly listed companies in the US, with Saylor emulating it. Bernstein analysts predict that Bitcoin will be able to see a $300 billion inflow through the Department of Corporate Treasury before 2030. The subsidiaries of StriveEnterprisesInc. are one of the latest companies to participate in this trend.
The strategy holds around $55 billion in Bitcoin (the majority of copycats), and plans to raise $84 billion to buy more by selling a combination of stock and fixed income equipment.
Because of strategy, this self-reinforcement cycle of leverage and momentum has been a huge success. The company trades at a market capitalization that is far beyond the value of the underlying Bitcoin. The premium promoted a 36% rallies this year’s shares against a 6% profit on the coin. Last year, it brought cryptocurrency to 238% points.
The strategy has long served as a proxy for Bitcoin exposure, particularly before 2024, when Bitcoin ETFs were first launched in the US. However, even if a new generation of relatively inexpensive ETFs offer increased exposure to Bitcoin, given the company’s large holdings and leverage use, the strategy stands out as the ultimate way to all-in with the original cryptocurrency.
“It’s attractive when you trade volatility,” said Wilfred Day of Samara Alpha Management, which runs its own crypto hedge fund. “It’s a story that shareholders want to hear.”
Twenty One’s prospectus lists “future innovations that replace native lending models, capital market commodities, and legacy financial tools with Bitcoin-based alternatives” and “Bitcoin-centric content and media.”
“They have real business plans around Bitcoin, but that’s not just a financial strategy,” says Monness, Crespi, Hardt & Co. Gustavo Gala, an analyst at Inc., talks about 21.
However, it is not difficult to see how this crypto motion machine can lose its luster if a market slump occurs. For example, investors may reach a point of fatigue. Samara’s Daye points to a recent announcement of a strategy imitation plan that was not welcomed in the market. GamestopCorp. The stocks first tanked last month after saying they would bear debt to buy Bitcoin.
“The market can be more sensitive to MicroStrategy’s strategy. Shareholders are exhausting,” says Daye, who is also the chief strategy officer at Mercurity Fintech. “So you’re already seeing a kind of polarization.”
– Support from Isabelle Li, Muyao Shen and Yiqin Shen.
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