Key Takeaways
- Jack Mallers, a Bitcoin maximalist and Strike CEO, is now Co-Founder and CEO of Twenty One, a Bitcoin-native public company valued at $3.6 billion.
- Twenty One, formed through a SPAC merger with Cantor Equity Partners, will hold over 42,000 Bitcoin, making it the third-largest Bitcoin treasury globally.
- The company introduces Bitcoin-denominated metrics, Bitcoin Per Share (BPS) and Bitcoin Return Rate (BRR), to measure performance in Bitcoin terms.
- Backed by Tether and SoftBank, Twenty One aims to develop Bitcoin-native financial products, enhancing institutional Bitcoin adoption.
- Mallers’ vision for Twenty One positions it to compete with companies like MicroStrategy while pioneering a new Bitcoin-focused corporate model.
Jack Mallers, a leading figure in the Bitcoin ecosystem, launches Twenty One, a Bitcoin-native company poised to reshape institutional Bitcoin adoption. Backed by Tether and SoftBank, Twenty One emerges from a $3.6 billion business combination with Cantor Equity Partners, holding over 42,000 Bitcoin at its debut. Mallers, renowned for founding Strike and advocating Bitcoin as a transformative financial tool, drives this venture to create innovative Bitcoin-native financial products and redefine corporate success through Bitcoin-denominated metrics. This bold initiative signals a new era for Bitcoin in public markets, blending traditional finance with cryptocurrency innovation.
Jack Mallers: Background & Career Trajectory
Jack Mallers has established himself as an influential Bitcoin innovator and entrepreneur. Born in 1994 in Chicago, Illinois, Mallers comes from a family with deep roots in traditional finance. His grandfather served as chairman of the Chicago Board of Trade, and his father founded one of the largest futures brokerages in Chicago. Despite this financial pedigree, Mallers charted his own path, attending St. John’s University in New York briefly before dropping out to attend the Starter School, a coding bootcamp in Chicago, where he developed his technical skills.
Mallers’ entry into the Bitcoin space began in 2013 when his father introduced him to the cryptocurrency, though he began engaging more seriously with it several years later. His most recognized achievement prior to Twenty One has been founding and leading Strike, a popular payment platform built on Bitcoin’s Lightning Network that enables users to quickly make transactions without fees. Under his leadership, Strike has become one of the world’s leading digital payment providers on Bitcoin’s Lightning Network, pioneering Bitcoin brokerage infrastructure and facilitating Bitcoin’s integration into corporate balance sheets.
Bitcoin Philosophy & Advocacy
Mallers has positioned himself as a staunch Bitcoin maximalist. In January 2024, he made headlines by declaring that he no longer owned any US dollars, not “even a penny,” having gone “all-in” on Bitcoin. His reasoning stemmed from a critique of the US economic system and what he perceives as the ongoing devaluation of the dollar.
“As an American millennial, I love our country but I oppose our money,” Mallers stated, arguing that America’s abandonment of the Gold Standard in 1971 has created a “post-industrial economic wasteland” characterized by “hyper-financialization, hyper-asset inflation, and a disgruntled population.” He has attributed wealth inequality to currency devaluation, contending that “printing money makes those who own assets richer, and those who can’t afford them poorer.”
Beyond his business ventures, Mallers has played a significant role in Bitcoin adoption at the governmental level, particularly in El Salvador, where he helped facilitate Bitcoin becoming legal tender. His influence extends to media appearances where he advocates for Bitcoin as a solution to economic challenges and promotes its adoption by institutions and governments worldwide.
Twenty One: A Bitcoin-Native Public Company
Structure & Business Model
Twenty One Capital, Inc. (Twenty One) represents a novel approach to Bitcoin investment and corporate structure in the public markets. Twenty One is being formed through a business combination with Cantor Equity Partners, Inc. (CEP), a special-purpose acquisition company (SPAC) sponsored by an affiliate of Cantor Fitzgerald. The transaction gives Twenty One a $3.6 billion enterprise value and is expected to provide $540 million in proceeds, with additional subscription agreements raising $585 million of additional capital.
At its launch, Twenty One will be majority-owned by Tether, the world’s largest stablecoin issuer, and Bitfinex, with significant minority ownership by SoftBank Group. The company will launch with over 42,000 Bitcoin, making it the third-largest Bitcoin treasury in the world. Shares of Cantor will continue trading on Nasdaq under the symbol CEP until the transaction closes, after which Twenty One will seek to trade under the ticker XXI.
Bitcoin-Denominated Performance Metrics
In a significant departure from traditional corporate performance measures, Twenty One will introduce two key performance metrics that reflect its Bitcoin-denominated capital structure:
- Bitcoin Per Share (BPS): This metric represents the amount of Bitcoin each fully-diluted share represents, reflecting shareholder ownership in Bitcoin rather than fiat earnings per share.
- Bitcoin Return Rate (BRR): This measures the rate at which BPS grows over time, denominating the company’s performance in Bitcoin rather than fiat currency.
These metrics represent a fundamental shift in how corporate success is measured, away from fiat-denominated earnings and toward Bitcoin accumulation.
Strategic Vision & Operations
Twenty One is structured to “allocate capital to increase Bitcoin per share” and plans to develop financial products built with and on Bitcoin. As Mallers expressed: “Our mission is simple: to become the most successful Bitcoin-native company, the most valuable financial opportunity of our time. We’re not here to beat the market; we’re here to build a new one. A public stock, built by Bitcoiners, for Bitcoiners.”
The company intends to develop a corporate architecture capable of supporting financial products built with and on Bitcoin, including native lending models, capital market instruments, and innovations that replace legacy financial tools with Bitcoin-aligned alternatives. Additionally, Twenty One plans to produce original Bitcoin-focused content and media and serve as a pro-Bitcoin advocate.
Implications For The Cryptocurrency Industry
Institutional Bitcoin Adoption
The formation of Twenty One represents a significant milestone in institutional Bitcoin adoption. With backing from established financial players like SoftBank Group and cryptocurrency giants like Tether, Twenty One brings together traditional finance and Bitcoin-native expertise in a structure accessible to public market investors.
By offering a pure-play Bitcoin exposure vehicle with an operating business, Twenty One provides institutional investors with a regulated pathway to gain Bitcoin exposure without directly holding the asset. This could accelerate institutional Bitcoin adoption, particularly for entities with investment mandates that restrict direct cryptocurrency holdings.
Bitcoin Treasury Competition
Twenty One’s launch positions it as the third-largest corporate Bitcoin treasury in the world. This places it in competition with established Bitcoin treasury companies like MicroStrategy, led by Michael Saylor. The comparison is particularly relevant as Mallers has referenced Saylor in past statements, noting: “Michael Saylor has bought $30 billion worth of Bitcoin. He thinks Bitcoin’s a good idea for him, and he wants America to think the same.”
This competition could spark a new wave of corporate Bitcoin accumulation, as publicly traded companies seek to establish significant Bitcoin positions to appeal to investors looking for Bitcoin exposure through equity markets.
Evolution Of Bitcoin Financial Products
Twenty One’s stated intention to develop Bitcoin-native financial products could accelerate innovation in this space. By building lending models, capital market instruments, and other financial tools designed specifically for Bitcoin, Twenty One could help bridge the gap between traditional finance and the Bitcoin economy.
This approach aligns with his views about Bitcoin’s potential market share: “There’s $900 trillion worth of stuff people own in the world, and about half of that people are using it as money to save and persist their wealth. The monetary opportunity is for $500 trillion dollars in today’s purchasing power.” Twenty One appears positioned to build infrastructure to capture a portion of this market.
Corporate Governance Innovation
The introduction of Bitcoin-denominated performance metrics (BPS and BRR) represents an innovation in corporate governance and investor relations. By measuring success in Bitcoin rather than dollars, Twenty One is establishing a new paradigm for how publicly traded companies can align with Bitcoin’s value proposition as a store of value and unit of account. This approach could influence other companies to adopt similar metrics, particularly those with significant Bitcoin holdings or operations in the cryptocurrency space.
Comparison With Other Bitcoin-Focused Public Companies
While several public companies have accumulated Bitcoin treasuries or offer Bitcoin-related services, Twenty One’s approach differs in several key aspects:
- Pure Bitcoin Focus: Unlike companies that have added Bitcoin to their treasury while maintaining their core business (like Tesla or MicroStrategy), Twenty One is being built from the ground up as a Bitcoin-native company.
- Bitcoin-Denominated Metrics: The introduction of BPS and BRR represents a novel approach to measuring corporate performance in Bitcoin terms rather than fiat currency.
- Strategic Backing: The involvement of Tether, the world’s largest stablecoin issuer, and SoftBank Group provides Twenty One with significant financial and strategic resources from both the cryptocurrency and traditional finance sectors.
- Leadership: With Mallers at the helm, Twenty One benefits from leadership with deep expertise in both Bitcoin technology, particularly the Lightning Network, and Bitcoin-based financial services.
This unique combination of factors positions Twenty One in a category of its own among publicly traded Bitcoin-focused companies.
Challenges & Future Outlook
Regulatory Considerations
As a publicly traded company with a focus on Bitcoin and Bitcoin-native financial products, Twenty One will navigate a complex regulatory landscape. Mallers has previously commented on regulation in the cryptocurrency space, suggesting that clear regulatory frameworks could help distinguish between Bitcoin and other digital assets that might be classified as securities. The company’s approach to regulatory compliance and engagement with regulatory bodies will likely influence broader regulatory developments in the cryptocurrency industry.
Market Volatility Management
Bitcoin’s price volatility presents both opportunities and challenges for Twenty One. While volatility can enhance returns when Bitcoin appreciates, it also introduces balance sheet risks during market downturns. Mallers has addressed this concern in previous statements: “As a business, we accept that. We take a personal responsibility to be ethically and morally profitable because we want to be good for the world.”
Twenty One’s approach to managing this volatility while pursuing its mission of increasing Bitcoin per share will be closely watched by investors and industry observers.
Integration With Strike & Lightning Network Development
With Mallers continuing his existing roles and responsibilities, presumably including his position as CEO of Strike, questions arise about potential synergies between Twenty One and Strike. The Lightning Network, on which Strike is built, enables fast, low-cost Bitcoin transactions, complementing Bitcoin’s role as a store of value. Twenty One’s development of Bitcoin-native financial products could potentially leverage Lightning Network technology, creating an ecosystem of complementary services across Mallers’ ventures.
Bitcoin-Native Company Twenty One: Mallers’ Bold Step Forward
Jack Mallers’ appointment as CEO of Twenty One represents a significant development in the institutionalization of Bitcoin. Through this new venture, Mallers is extending his influence from the payment processing space with Strike to a broader role in Bitcoin advocacy, accumulation, and financial product development.
Twenty One’s innovative structure, significant initial Bitcoin holdings, and backing from major players in both the cryptocurrency and traditional finance sectors position it as a potentially transformative force in the Bitcoin ecosystem. By introducing Bitcoin-denominated performance metrics and focusing on Bitcoin-native financial products, Twenty One is pioneering a new approach to corporate structure and governance in the cryptocurrency space.
As this new venture unfolds, it will likely influence institutional Bitcoin adoption, corporate treasury strategies, and the development of Bitcoin-based financial products. For investors, regulators, and participants in the cryptocurrency industry, Twenty One’s progress will provide valuable insights into the evolution of Bitcoin as both a technology and a financial asset.
Michael Crag
