- Jack Mallers' Twenty One falls 20% in trading debut.
- It comes as other Bitcoin treasury firms face increasing pressure.
- Twenty One is majority-owned by stablecoin giant Tether.
Shares in the highly anticipated Bitcoin treasury firm Twenty One Capital plummeted 20% on its listing debut on Tuesday.
Jack Mallers, the plucky Bitcoin evangelist running the venture, vowed in April to best the sector’s biggest Bitcoin buyers, including Michael Saylor’s Strategy and Wall Street titan BlackRock.
Tuesday’s double-digit crash on the New York Stock Exchange has since dampened the excitement.
The problem?
Once invincible, Bitcoin treasury firms such as Twenty One have faced increasing pressure in recent months as cryptocurrencies plummet in value.
Since Bitcoin hit an all-time high of $126,080 in October, it has fallen by some 27%, dragged by macroeconomic factors and market anxiety over the US Federal Reserve’s lack of interest rate cuts.
Now, companies that raised capital to buy Bitcoin over $100,000 — thinking the asset would never drop below six-figures — are sitting on massive unrealised losses while their equity premiums have simultaneously evaporated.
Metaplanet, a Japanese hotel operator turned Bitcoin treasury firm, has swung from over $600 million in unrealised profits in early October to around $530 million in unrealised losses as of December 1, per Galaxy Research data.
Other firms with substantial Bitcoin positions, such as Trump Media and Technology Group, GD Culture Group, and Empery Digital, are also staring down tens of millions of dollars in unrealised losses as their share prices plummet.
Lack of confidence?
Twenty One’s trading debut makes it the third-largest Bitcoin treasury firm behind Saylor’s Strategy and MARA Holdings, a Bitcoin mining firm.
The firm owns around 43,500 Bitcoin worth just over $4 billion. Yet its shares trade at a $3.85 billion market capitalisation.
Such discounts often signal market pessimism, underperformance, or a lack of investor confidence in the firm’s strategy or management.
Still, Twenty One is well-connected in both the crypto industry and the broader financial sector.
The firm was formed through a merger with Cantor Equity, a special purpose acquisition company backed by Cantor Fitzgerald, an investment banking and brokerage firm chaired by Brandon Lutnick, the son of US Secretary of Commerce Howard Lutnick.
Tether, the firm behind USDT, the largest stablecoin with over $185 billion in circulation, owns more than 50% of the venture, while SoftBank Group, one of the world’s biggest investment holding companies, also owns a significant minority stake.
Divided opinions
Mallers, too, is well-known in the industry for his Bitcoin fervour.
The 31-year-old has been tinkering with Bitcoin since at least 2016. Before taking on the role of CEO at Twenty One, he founded Zap, the parent company of Strike, an app which lets users send and receive payments over Bitcoin’s Lightning Network.
Yet his brash, unapologetic attitude has also divided opinions.
“I don’t give a fuck that you’re rich or popular,” Mallers said in a 2021 spat with Elon Musk over Tesla’s Bitcoin holdings.
“You clearly know nothing about Bitcoin or you’re more egotistic than we all thought.”
Tim Craig is DL News’ Edinburgh-based DeFi Correspondent. Reach out with tips at tim@dlnews.com.
