Cantor Fitzgerald, the financial services firm formerly led by U.S. commerce secretary Howard Lutnick, is the latest company to enter into the Bitcoin acquisition business.
The company, which is now chaired by Lutnick’s son Brandon Lutnick, is using a special purpose acquisition company (SPAC) called Cantor Equity Partners to create a new company called Twenty One Capital. That company will be owned in part by stablecoin giant Tether, crypto exchange Bitfinex, and Japanese investment company SoftBank, according to a statement released on Wednesday, and will be used to buy Bitcoin.
As a publicly traded company, Twenty One would allow investors to access Bitcoin’s price movements without investing in the currency directly, similar to Michael Saylor’s Strategy. It also plans to further the currency’s adoption by “supporting financial products built with and on Bitcoin” and producing “Bitcoin-focused content and media,” according to a company statement.
“Twenty One aims to be the most effective public vehicle for Bitcoin accumulation and monetization, with a mission to accelerate Bitcoin adoption and Bitcoin literacy,” the statement reads.
Tether and Bitfinex will own a majority stake in the new company, and SoftBank will have minority ownership. Twenty One will be led by cofounder and CEO Jack Mallers, the founder of Bitcoin infrastructure company Zap.
The company plans to launch publicly with more than 42,000 Bitcoin, worth around $4 billion at its current price of around $93,000. When the deal to create Twenty One closes, it has agreements with investors to raise an additional $585 million in capital, which will be used to purchase additional Bitcoin. The money was raised, in part, by issuing convertible notes, a type of debt financing that can be converted into equity at a later date.
Strategy, a software company formerly known as Microstrategy, has proven that Bitcoin acquisition can be extremely lucrative. The company has amassed 538,200 Bitcoins since 2020, worth nearly $50 billion at its current price, leading its stock to grow 2,600% as Bitcoin’s price increases. The company’s success has prompted others to attempt to get in on the hype as well, including medical device company Semler Scientific and Elon Musk’s Tesla.
However, Bitcoin buying has not been as successful for other companies. GameStop, the embattled video game retailer that has been struggling to keep its stock afloat in recent years, announced in March that it would begin stockpiling Bitcoin. While GameStop shares initially surged 14%, the stock slid 23% in the days that followed. Despite having successfully raised $1.3 billion for Bitcoin purchases, GameStop’s stock is down 10% year to date.
