Today, veteran U.S. investment bank Cantor Fitzgerald, along with Tether, Bitfinex, and SoftBank, is about to launch a $3 billion Bitcoin investment program to form 21 Capital, a company focused on direct Bitcoin holdings.The program is being led by Brandon Lutnick, son of U.S. Commerce Secretary Howard Lutnick. The program, spearheaded by Brandon Lutnick, the son of U.S. Commerce Secretary Howard Lutnick and current chairman of Cantor, is being viewed as a new version of MicroStrategy.
The new firm plans to track market performance through bitcoin holdings and will continue to expand its position through multiple rounds of funding. The news is not yet official, but according to multiple sources, the partnership is close to being finalized.
Leader’s Special Status, Resource Integration Capabilities in Focus
Brandon Lutnick is the chairman of Cantor Fitzgerald and the head of several SPACs. He graduated from Stanford University and has worked at Oak Hill Advisors and Cantor’s stock trading division, and is considered to have a strong background in financial operations.
But what is of particular interest to the market is his family background: Brandon Lutnick’s father, Howard Lutnick, is currently the U.S. Secretary of Commerce, and Cantor Fitzgerald has long been associated with Tether, including managing its reserve assets and holding convertible bonds issued by the company. Bloomberg has revealed that Brandon helped Tether reach out to right-wing platform Rumble and facilitate a $775 million investment.
In that partnership, Brandon, through his Cantor Equity Partners, raised $200 million in January, laying the groundwork for the subsequent formation of 21 Capital. The funds will be used as start-up capital in conjunction with subsequent large injections of digital currency, the source said.
Funding structure clear, targeting MicroStrategy
According to the information disclosed so far, 21 Capital will be funded by three parties with a total of $3 billion in bitcoin: Tether will contribute $1.5 billion, SoftBank will contribute $900 million, and Bitfinex will contribute $600 million. It’s worth noting that Tether and Bitfinex are owned by the same parent company and have cross management teams.
In addition to the digital currency contribution, 21 Capital plans to continue to expand its bitcoin position through a $350 million convertible bond and $200 million in private equity. This strategy is similar to MicroStrategy’s: raise money through the capital markets before focusing on buying Bitcoin to support the valuation with BTC as the company’s core asset.
In the future, the aforementioned funders will convert their bitcoin infusions into 21 Capital shares at a price of $10 per share, which translates to a bitcoin valuation of around $85,000 a piece. This means that 21 Capital is attempting to create a publicly traded structure with Bitcoin as the underlying asset.
The company’s goal is to become a “publicly traded bitcoin investment platform” that would allow traditional investors to hold BTC indirectly through shares, a structure that has gained popularity globally in recent years, with companies such as Japan’s Metaplanet having adopted a similar approach.
Complex Motives of the Partners, Market Impact Cannot be Ignored
The motives behind this cooperation may not be limited to simple “coin speculation”.
SoftBank has previously invested actively in the AI field, and its return to the crypto market has attracted a lot of attention. The market remembers that Masayoshi Son bought Bitcoin at a high point in 2017, eventually leaving the market with a loss of more than $130 million, and hasn’t been involved in the market for many years since. But this time he chose to join hands with Cantor and Tether, making people speculate whether it is intended to pry a larger digital financial layout?
Tether’s role is more subtle. As a stablecoin issuer, its position has long been subject to compliance pressure and market skepticism, but over the past year it has invested in agriculture, AI, and even brain-computer interfaces, with the intention of gradually transforming itself into a “digital asset holding company”. Now tied to Softbank and Cantor, perhaps also trying to use its political and capital access in the United States to strengthen its presence in the U.S. market.
Some market analysts believe that the combination of Tether and Softbank may constitute a “dollar liquidity arbitrage structure”: Tether issues USDT, Softbank invests in high-volatility assets through low-interest rate financing, leading to a cycle of USDT issuance and demand. This is hypothetical, but structurally there is room for maneuver.
Meanwhile, Cantor’s longstanding relationship with Tether, coupled with the involvement of the Commerce Secretary’s family, has led many investors to speculate that this operation may have already been “signaled”. One market observer even commented: “First MicroStrategy, now Cantor, Tether, SoftBank, is the national team next?”
While the partnership is close to being finalized, the final structure is still subject to change, and regulation remains a potential source of uncertainty, as Tether and Bitfinex reached a settlement with U.S. regulators in 2021 over disclosure issues. It will be interesting to see how compliance is ensured now that a public trading platform is in the works.
Conclusion
The emergence of 21 Capital marks a new phase in the trend of “bitcoin assetization. Compared to the buying of coins by individuals or private equity firms, this mode of operation, which is supported by large institutions and public structures, will likely have a far-reaching impact on market liquidity, valuation logic, and even regulatory attitudes. Whether it can replicate or even surpass MicroStrategy’s market effect remains to be seen, but there is no doubt that this program is becoming an important variable in the next phase of the Bitcoin market.
