21 Capital: A New Player in bitcoin Investment
Three major companies—Tether, SoftBank, and Cantor Fitzgerald—are joining forces to create 21 Capital, a $3.6 billion bitcoin investment firm. Jack Mallers, CEO of strike, will lead 21 Capital. The company plans to go public through a SPAC merger with Cantor Equity Partners.
21 Capital starts with 42,000 bitcoins, making it the second-largest public Bitcoin holder. softbank is investing $900 million, while Tether is contributing $1.5 billion. This setup aims to rival Saylor’s Strategy, a leading Bitcoin-focused company.
21 Capital will help corporations invest in Bitcoin without using crypto ETFs. It will use unique metrics like “Bitcoins Per Share” and “Bitcoin Return Rate.” Mallers emphasizes growing Bitcoin per share for shareholders.
Currently, 21 Capital trades as CEP but plans to switch to ticker XXI. The company’s bold move has drawn mixed reactions. Some see it as a powerful force in Bitcoin investment, while others are skeptical.
SoftBank, Tether, and Cantor Fitzgerald bring meaningful influence. SoftBank faced anti-monopoly fines in 2021, tether denied Bitcoin price manipulation in 2017, and Cantor Fitzgerald’s chair is the son of the U.S. Secretary of Commerce.
Jeff Park, from bitwise Invest, calls 21 Capital an “ultimate exorbitant privilege joint venture.” He believes it will boost dollar exports in a global carry system. The crypto community is divided on whether this is a positive advancement.
Stablecoins and the Future of the Dollar
Special-purpose banks holding digital assets could create a parallel dollar system. These stablecoins, backed 1:1 by U.S. Treasuries, might bypass the Federal Reserve’s role. This could change how dollars are intermediated.
Tether’s ties with U.S. financial officials and its leadership in treasury bills could boost the dollar’s value quickly. This might make U.S. goods too expensive for foreign buyers.
SoftBank’s Risky Investment History
SoftBank has a mixed investment history. Its founder, Masayoshi Son, was once the world’s richest man. He invested heavily in internet companies before the dot-com bubble burst, losing billions. Yet, his bet on Alibaba paid off.Despite this, Son’s reputation as an investor is controversial. He lost $70 billion during the dot-com crash. But his Alibaba investment was a massive win.
Though, Son’s investment in WeWork was a disaster, losing $16 billion. his Bitcoin investment also resulted in a $130 million loss. Son has pledged 38% of his SoftBank stake as collateral for personal loans.
Tether’s Uncertain Path
Tether, the company behind USDT, faces regulatory challenges.It left the European market due to mica law compliance issues.In the U.S., new regulations demand more transparency, which Tether has struggled with.
Tether is working on an African project to address electricity scarcity. Its involvement in 21 Capital aims to diversify its business. 21 Capital’s chair, Brandon Lutnick, is the son of the U.S. Secretary of Commerce, Howard Lutnick.
Through 21 Capital, Tether connects with U.S.government and Wall Street. this could impact the crypto sector and the global economy. The future of Tether and USDT remains uncertain.
