425: Twenty One, Backed by Tether and SoftBank, to Go Public Through Cantor Equity Partners SPAC Merger

Twenty One Capital, Inc., a Bitcoin-native company backed by Tether and SoftBank, is set to go public through a business combination with Cantor Equity Partners, Inc. (CEP).

Summary

• Cantor Equity Partners, Inc. (CEP), a SPAC, and Twenty One Capital, Inc. (Twenty One) have entered into a Business Combination Agreement.
• Upon completion of the merger, Twenty One will become a publicly traded company majority-owned by Tether and Bitfinex, with a significant minority stake held by SoftBank.
• Tether and Bitfinex will contribute 31,500 Bitcoin to Twenty One.
• SoftBank will purchase shares from Tether, ensuring Tether and Bitfinex maintain majority ownership.
• Twenty One will own at least 42,000 Bitcoin upon closing.
• The transaction includes a $385 million convertible note PIPE and a $200 million equity PIPE.
• Convertible Note Investors have an option to purchase an additional $100 million in Convertible Notes.
• Net proceeds from the PIPE Investments will be used to purchase Bitcoin and for general corporate purposes.
• The transaction values Twenty One at a pro-forma enterprise value of $3.6 billion, based on a Bitcoin spot price of $84,863.57 as of April 21, 2025.
• The company expects to receive approximately $540 million in proceeds.

Sentiment

Score: 7

Explanation: The sentiment is moderately positive. The deal brings together established players in the crypto and finance worlds, but the inherent volatility of Bitcoin and regulatory uncertainties temper the outlook.

Positives

• Twenty One will launch with a substantial Bitcoin treasury of over 42,000 BTC.
• The company has backing from major players like Tether, Bitfinex, and SoftBank.
• The PIPE investments will provide significant capital for Bitcoin acquisition and corporate purposes.
• Jack Mallers, a prominent figure in the Bitcoin space, will lead the company.
• The company aims to develop Bitcoin-native financial products and services.

Negatives

• The company's success is heavily reliant on the volatile price of Bitcoin.
• The company is subject to regulatory risks associated with Bitcoin and crypto assets.
• The company has a limited operating history.
• The company will issue non-voting Class A shares.

Risks

• The transaction may not be completed in a timely manner or at all.
• Failure to obtain shareholder approval or complete the PIPE investments could derail the deal.
• The price of Bitcoin is highly volatile and could negatively impact the company's value.
• Regulatory uncertainty surrounding Bitcoin and crypto assets poses a risk.
• Increased competition in the Bitcoin-related industries could affect the company's prospects.
• The company may face challenges in managing its growth and expanding operations.
• The company may be considered a shell company by regulatory bodies.

Future Outlook

Twenty One aims to become the most successful company in Bitcoin, developing Bitcoin-native financial products and services and promoting Bitcoin adoption globally.

Management Comments

• Jack Mallers, Co-Founder and CEO of Twenty One, stated, 'We believe that Bitcoin is the answer, and Twenty One is how we bring that answer to public markets.'
• Paolo Ardoino, CEO of Tether, said, 'Twenty One will take a Bitcoin-first approach that aligns with our visionprioritizing accumulation over speculation and building long-term value for those who understand what Bitcoin represents.'
• Brandon Lutnick, Chairman & CEO of Cantor Equity Partners, Inc., stated, 'With a visionary leader at the helm and backing from two renowned industry leaders, Twenty One is designed to help investors capture value from Bitcoins growing global demand and increasing institutional adoption.'

Industry Context

This announcement reflects the growing interest in Bitcoin as a treasury asset and the increasing trend of companies seeking to provide Bitcoin-related financial services. The merger aims to create a publicly traded vehicle for Bitcoin exposure, similar to MicroStrategy (MSTR) but with a more focused approach.

Comparison to Industry Standards

• MicroStrategy (MSTR) is a key comparable company, known for its significant Bitcoin holdings.
• As of March 28, 2025, MSTR held approximately 506,137 BTC.
• Twenty One aims to differentiate itself by focusing on Bitcoin-native operations and maximizing Bitcoin per share (BPS).
• Unlike Bitcoin ETFs, Twenty One intends to actively manage its Bitcoin holdings and develop related financial products.
• The company's strategic advantages include pure-play Bitcoin exposure and the ability to strategically raise and deploy capital.

Stakeholder Impact

• Shareholders of CEP will have the opportunity to invest in a Bitcoin-focused company.
• Employees of Twenty One will become part of a publicly traded entity.
• Customers may benefit from new Bitcoin-native financial products and services.
• The transaction could increase Bitcoin adoption and literacy globally.

Next Steps

• CEP shareholders need to approve the Business Combination.
• The parties will file a Registration Statement on Form S-4 with the SEC.
• The transaction is subject to customary closing conditions.
• Twenty One will seek to trade on Nasdaq under the ticker symbol XXI after closing.

Key Dates

Keywords

Bitcoin, Twenty One Capital, Cantor Equity Partners, SPAC, Merger, Tether, Bitfinex, SoftBank, PIPE Investment, Cryptocurrency, Business Combination