Twenty One Capital, trading under the ticker XXI, opened at $10.74 on Tuesday before sliding to around $10.50—perilously close to its private investment pricing of $10 and well below the previous closing price of $14.27 for Cantor Equity Partners, the special purpose acquisition company it merged with to go public.
The sharp decline puts the Austin-based company's market capitalization at approximately $3.8 billion, raising eyebrows given that its Bitcoin holdings of 43,514 BTC are currently valued at roughly $4 billion. The stark disconnect between the company's market value and its underlying assets suggests investors remain skeptical about the premium these Bitcoin treasury vehicles are attempting to command.
Twenty One represents the latest entry in a growing but troubled cohort of companies adopting the "Bitcoin treasury" model—essentially using investor capital to accumulate Bitcoin while trading as publicly listed stocks. The firm is majority-owned by Tether, the controversial stablecoin issuer, along with the Bitfinex exchange, with significant backing from SoftBank Group and Cantor Fitzgerald.
At the helm is Jack Mallers, founder and CEO of Strike, a Bitcoin Lightning Network payment provider. Mallers has positioned Twenty One as more than just a Bitcoin accumulation vehicle, promising to develop "Bitcoin-native financial services" including lending, capital markets advisory, and educational media initiatives.
However, the market's reception suggests investors may be growing weary of these promises. Twenty One's debut mirrors an increasingly familiar pattern among Bitcoin treasury stocks. ProCap BTC, the vehicle launched by cryptocurrency promoter Anthony Pompliano, has crashed more than 60% since completing its own SPAC merger just last week, now trading around $3.75. Another Bitcoin treasury company, KindlyMD, has plummeted 99% from its all-time high and currently trades at a mere $0.43.
The struggles of these companies raise fundamental questions about the investment thesis behind Bitcoin treasury vehicles. Critics argue that if investors simply want Bitcoin exposure, they can buy Bitcoin directly or invest in spot Bitcoin ETFs from established financial institutions like BlackRock and Fidelity, which trade on the same exchange with lower fees and greater transparency.
The PIPE (private investment in public equity) financing methodology that has become standard for these deals is also coming under scrutiny. Twenty One's business combination included $486.5 million in senior convertible notes and approximately $365 million in common equity PIPE investments—complex financial instruments that some market observers view as adding unnecessary layers of risk and dilution for public shareholders.
Twenty One has attempted to differentiate itself by committing to publish on-chain proof of its Bitcoin reserves and introducing metrics like "Bitcoin Per Share" to provide transparency. The company transferred its entire BTC holdings to a new wallet on Monday, potentially in preparation for this verification system.
Yet transparency alone may not be enough to justify premiums over net asset value when the underlying asset—Bitcoin itself—can be purchased directly. With Bitcoin trading around $94,300, investors appear to be questioning why they should pay a premium for corporate structures, management fees, and operational overhead when the digital asset is freely available.
The debut also comes at a potentially awkward time, with traders awaiting the Federal Reserve's final interest rate decision of the year. Markets are pricing in near certainty of a 0.25% rate cut following the Fed's two-day policy meeting, but broader questions about monetary policy and risk asset valuations continue to loom over financial markets.
Despite backing from major institutional players and Cantor Fitzgerald CEO Howard Lutnick's connections to the incoming Trump administration as Commerce Secretary nominee, the market has delivered a sobering verdict on Twenty One's first day as a public company.
Mitchell Askew, head of Blockware Intelligence, had predicted Twenty One would "be a major player not only in Bitcoin, but in the grand arc of financial history," citing the company's powerful institutional connections. The opening day performance suggests the market may need more convincing before it shares that optimistic view.
As Bitcoin treasury companies continue to proliferate—Twenty One now ranks as the third-largest public corporate Bitcoin holder after Michael Saylor's Strategy and MARA Holdings—investors will be watching closely to see whether these vehicles can justify their existence or whether they represent yet another chapter in cryptocurrency's long history of financial engineering that promises innovation but delivers disappointment.