(April 30): Tether has proposed that Twenty One Capital merge with Strike, a crypto trading and spending platform, and Elektron Energy, a bitcoin mining firm, at a time when Twenty One Capital’s main business of investing in bitcoin has fallen out of favour.
Twenty One launched in December via a special purpose acquisition company, backed by the stablecoin giant Tether, the Japanese investment firm SoftBank Group Corp and the investment bank Cantor Fitzgerald LP. It held more than 40,000 Bitcoin — the third-largest corporate holding at the time.
When the operation was first announced, publicly traded cryptocurrency treasury companies were popular, following the successful playbook of Michael Saylor’s Strategy. After the price of bitcoin went into decline, though, the shares of many treasury companies dropped even more sharply. Critics questioned why investors would buy shares in bitcoin-holding companies when they could buy bitcoin itself.
Twenty One Capital has fallen 31% since debuting on the New York Stock Exchange in December, compared with bitcoin’s 18% decline.
In a proposal released Wednesday, Tether said that combining Twenty One with related businesses would allow it to move “beyond treasury exposure alone and towards a platform with operating businesses, recurring revenue opportunities, and long-term bitcoin accumulation capabilities.”
Tether said Jack Mallers, who already runs both Twenty One and Strike, should lead the combined company. Terms and timing weren’t disclosed. Tether, Twenty One and Elektron didn’t respond to requests for comment.
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The consolidation push reflects a broader shift among treasury companies to add revenue-generating operations that provide some cash flow beyond their cryptocurrency holdings.
Uploaded by Liza Shireen Koshy
