Tether, Cantor, and SoftBank discovered that Twenty One amassed Bitcoins
In a significant move for the cryptocurrency market, a new company named Twenty One has been launched, aiming to accumulate additional bitcoins with an initial capital of 42,000 bitcoins, currently worth around four billion dollars. The company's establishment marks the second major US bank to adopt a bitcoin standard.
Twenty One, a publicly traded company, was launched in partnership by Cantor Fitzgerald and Brandon Lutnick, son of US Secretary of Commerce Howard Lutnick. The company's success will be measured by Bitcoins per Share (BPS) and the "Bitcoin Return Rate" (BRR). Jack Mallers, founder of Strike, will be the CEO of Twenty One.
The company has secured substantial investments to fuel its growth. Tether, a stablecoin issuer, is contributing $1.5 billion worth of bitcoins, Bitfinex $900 million, and SoftBank, the Japanese technology conglomerate, $600 million. It's unclear, however, why SoftBank is involved in Twenty One or if they see it as an opportunity to strengthen their access to the US bitcoin market.
SoftBank, a pioneer in the technology sector, has been active in the crypto market since around 2020. They have invested in Web3 infrastructure, the FTX exchange, and Mercado Bitcoin exchange. SoftBank's focus on artificial intelligence (AI) is well-known, with major stakes in companies like Taiwan Semiconductor (TSMC) and OpenAI. Masayoshi Son, CEO of SoftBank, even emphasized controlling AI as controlling the future, shifting the company's focus toward AI technology and chip manufacturing.
The US government recognizes the crucial role stablecoins play in maintaining and expanding the dollar's global dominance. In response, they are set to regulate stablecoins with the GENIUS Act. Under this Act, bitcoin isn't included in the assets that qualify as reserves, while short-term bonds and, under certain restrictions via overnight repos, even equities are.
Companies like Twenty One could play a crucial role in transforming parts of the dollar into national bitcoin reserves if bitcoin were to supplant the dollar as the global reserve currency. If Tether aims to continue operating in the US, it will need to restructure its reserves over time and may transfer bitcoins to Twenty One to retain ownership while remaining compliant with impending regulation.
Masayoshi Son, CEO of SoftBank, invested $200 million in bitcoin but sold off his coins in 2018 at a loss. He has expressed interest in the potential of bitcoin and cryptocurrencies but has since moved on. Son announced plans to invest $100 billion in the US over the coming years, with a focus on AI, following Trump's election victory.
The success of Twenty One will be closely watched by the cryptocurrency industry and beyond. As the company grows and navigates the complex regulatory landscape, it could pave the way for a future where bitcoin plays a significant role in global finance.
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