Cryptocurrency Purchase by Tether: A $459 Million Bitcoin Reserves Transfer for Twenty One Capital
Here's the Rewritten Article:
Title: Tether Jumps Into Bitcoin Game: $460 Million Investment
Ad Disclosure analyses a fresh move made by a prominent stablecoin issuer, Tether, investing nearly half a billion dollars in Bitcoin. On May 13, Tether filed a report with the US Securities and Exchange Commission, revealing they bought 4,812 BTC at an average price of $95,319 each on May 9. This strategic purchase has added a substantial chunk of BTC to a special escrow wallet linked to Twenty One Capital, a firm supported by Tether eyeing a SPAC merger with Cantor Equity Partners.
Major Players in the Bitcoin Game
The corporate Bitcoin narrative has been taking center stage with significant players like Tether joining the league. Based on recent reports, Tether isn't just minting tokens anymore. Instead, it's diving headfirst into direct price risk, amassing nearly $460 million worth of Bitcoin in Twenty One's vault. This investment positions Tether among the league of corporate Bitcoin holders, with Twenty One's total stash now sitting at 36,312 BTC. Cantor Equity Partners also holds 31,500 BTC on behalf of Twenty One, while the rest has been sourced directly from Tether's reserve funds.
Bumpy Share Price Ride
Twenty One's future shares will trade under the much-anticipated ticker XXI once its SPAC deal seals. The CEO, Jack Mallers, has hinted that necessary approvals are on the horizon, although he hasn't set a concrete date. Investors have already experienced a wild ride with XXI shares, which jumped from $10.65 to $59.73 on May 2, only to slip back down to $29.84 and rebound another 5.2% during after-hours trading following the latest investment.
Backing from Big Names
Tether isn't the only one backing Twenty One's Bitcoin ambitions. SoftBank has pledged a significant $900 million, while Bitfinex will convert around 7,000 BTC into equity at $10 per share. Cantor Fitzgerald leads the SPAC, lining up $585 million to support more Bitcoin acquisitions. Though these heavy hitters add weight to the venture, each partner introduces its unique set of risks, from volatile markets to fluctuating strategies.
Climbing the Corporate Bitcoin LadderWith 36,312 BTC in its treasure chest, Twenty One Capital is poised to slide into the third spot among corporate Bitcoin holders. Strategy (formerly MicroStrategy) holds the top position with an impressive 568,840 BTC, while BMO-backed Marathon Digital holds 48,237 BTC. Twenty One is gearing up to challenge that third spot, attempting to appeal to investors seeking pure Bitcoin exposure.
Bitcoin-Per-Share StrategyTwenty One's game plan hinges on raising dollars not for generating profits but for buying more BTC. In contrast to most public companies, which set their sights on earnings-per-share, Twenty One aims to grow its BTC holdings. This approach delineates a distinct contrast with traditional financial strategies.
Navigating the SPAC MinefieldThough the SPAC route holds immense potential, it is far from a smooth ride. Delays in SEC approvals, shifts in capital-raise terms, and the inherent volatility of Bitcoin pose major hurdles. A swift SEC green light and tactful management of the expanding Bitcoin stash will determine whether stablecoin issuers become influential players in the Bitcoin game.
Featured image from Gemini Imagen, chart from TradingView
Editorial ProcessThe reality in the crypto world is constantly evolving, making it crucial to keep up with the latest trends and key players. Currently, key corporate Bitcoin holders include BlackRock's iShares Bitcoin Trust ETF, Strategy (formerly MicroStrategy), MARA Holdings, Riot Platforms, CleanSpark, Tesla, and Twenty One Capital, among others, with holdings subject to change based on continuous acquisitions and management decisions. Keep tabs on the latest developments as the crypto landscape continues to unfold.
- In the world of finance and technology, Tether has demonstrated its intention to expand beyond token minting, investing $460 million in Bitcoin, positioning itself among other major corporate Bitcoin holders.
- As Twelve One Capital's Bitcoin holdings surpass 36,000 BTC, the company is poised to climb the ranks of major corporate Bitcoin holders, adopting a unique strategy that seeks growth in Bitcoin holdings rather than earnings per share, a stark departure from traditional business practices.
