21 Capital: a new Bitcoin treasury powerhouse challenging Strategy’s dominance

A major new player is making waves in the Bitcoin space, and savvy investors are taking notice. 21 Capital is launching as a purpose-built vehicle for Bitcoin investment through public equity markets, promising to reshape the landscape of corporate Bitcoin adoption. Currently trading as CEP (Cantor Equity Partners) while awaiting its SPAC merger completion, the company will soon adopt the symbolic ticker XXI—representing Bitcoin’s 21 million coin supply cap.

This new entrant creates significant competition for Strategy (formerly known as MicroStrategy), which has dominated the corporate Bitcoin treasury landscape with its holdings of 568.840 Bitcoin valued at USD 58.062 bln. As 21 Capital emerges with its unique approach and heavyweight backing, investors now have another option for Bitcoin exposure through public markets.

A Bitcoin treasury giant from day one

What makes 21 Capital particularly noteworthy is the scale at which it’s entering the market. The company is launching with an impressive 42,000 Bitcoin on its balance sheet, worth approximately $4 billion at current prices of around $95,000 per Bitcoin. This immediately positions it as the third-largest public Bitcoin treasury company globally, creating an instant powerhouse in the Bitcoin ecosystem.

While this is substantial, it still falls short of Strategy’s market-leading 568.840 Bitcoin holdings. However, 21 Capital’s immediate scale at launch is unprecedented for a new entrant and creates instant credibility in the Bitcoin treasury space.

This isn’t just another company cautiously dipping its toes into the Bitcoin waters. 21 Capital represents a bold, all-in approach to corporate Bitcoin strategy, backed by some of the most significant players in both cryptocurrency and traditional finance sectors.

Heavyweight backers inspire confidence

The ownership structure of 21 Capital reveals the involvement of major institutions that bring both cryptocurrency expertise and traditional financial muscle. According to the SEC filing dated April 28, 2025, Pubco (the post-merger entity that will become 21 Capital) will adopt a dual-class share structure that clearly delineates economic rights from governance control.

Class A shares will carry economic rights but no voting power (except as required by law), while Class B shares will have voting rights but no economic interest. This structure means that public investors in 21 Capital will own non-voting shares, while Tether, Bitfinex, and SoftBank will maintain complete governance control through their Class B holdings.

Upon closing of the business combination, Tether—the world’s largest stablecoin issuer—will be the controlling shareholder with the majority of voting power. Bitfinex, a major cryptocurrency exchange, and SoftBank Group—one of the world’s leading investment holding companies—will hold the remaining voting power. This convergence of cryptocurrency leaders and a mainstream financial giant signals strong institutional confidence in both the Bitcoin treasury model and 21 Capital’s specific approach.

This ownership structure differs significantly from Strategy, which has a more diversified shareholder base and is led by founder and Executive Chairman Michael Saylor. Strategy’s leadership position in the Bitcoin treasury space has been driven largely by Saylor’s vision and execution, while 21 Capital is taking a more institutionally-driven approach from inception.

The board of directors at 21 Capital will consist of seven members, with six designated by Tether, Bitfinex, and SoftBank, and the seventh being the CEO of the company. This concentrated governance further ensures aligned execution toward the company’s Bitcoin-focused mission.

Beyond simple Bitcoin accumulation

While many companies have added Bitcoin to their treasuries as a defensive inflation hedge, 21 Capital is positioning itself with a more comprehensive and ambitious strategy. The company describes itself as a “purpose-built vehicle for Bitcoin investment” that presents a “compelling opportunity for value creation.”

The fundamental thesis driving 21 Capital centers on several key factors influencing Bitcoin’s growing importance: institutional and governmental adoption, elevated global inflation, ongoing geopolitical instability, and the evolution of clearer regulatory frameworks. Rather than simply holding Bitcoin passively, 21 Capital aims to leverage its substantial holdings as a foundation for generating additional returns for shareholders.

This approach includes developing several complementary business lines: advocating for greater Bitcoin adoption, creating Bitcoin-focused educational content and media, and potentially expanding into Bitcoin-native financial products. The company is positioning itself not just as a Bitcoin holder but as an active participant in building the broader Bitcoin economy.

This mirrors Strategy’s evolution, which has expanded from simply holding Bitcoin to creating a sophisticated financial ecosystem around its Bitcoin treasury, including innovative financial instruments like convertible bonds with an average interest rate of just 0.421% and preferred stock offerings.

Sophisticated financial engineering

21 Capital is implementing a complex yet thoughtfully structured financial strategy to support its ambitious goals. According to the SEC filing, the company has set a financing target of $585 million through two primary channels: $385 million in 1.00% convertible senior secured notes due 2030 and $200 million through common equity PIPE financing.

The initial Bitcoin holdings are being assembled through a combination of direct contributions and strategic purchases, with precise details now confirmed in the formal Contribution Agreement. Tether will contribute 24,500 Bitcoin and Bitfinex will contribute 7,000 Bitcoin at the closing of the transaction, for a total of 31,500 Bitcoin.

Additionally, Tether will purchase Bitcoin using the net proceeds from both the convertible notes (initially $340 million with an option for $100 million more) and equity PIPE ($200 million), less specific holdbacks detailed in the agreements. To ensure minimum scale at launch, Tether has also committed to contribute additional Bitcoin if the total PIPE-related Bitcoin falls short of 10,500 BTC at closing. This backstop mechanism strengthens 21 Capital’s liquidity position and underpins its market readiness.

Some PIPE investors have already elected to directly pay in Bitcoin rather than cash, with 2,950,000 PIPE shares being purchased for 347.6168 Bitcoin and the remaining 17,050,000 PIPE shares to be purchased in cash. The Bitcoin pricing for these transactions is based on the agreed “Signing Bitcoin Price” of $84,863.57, calculated as the average CME CF Bitcoin Reference Rate for the ten-day period ending prior to the Business Combination Agreement.

This sophisticated financial structure creates several strategic advantages. It provides immediate scale, significant leverage capacity, strategic flexibility, and the institutional backing necessary to execute a Bitcoin-focused strategy with substantial resources from day one.

Strategy has pioneered this financial engineering approach in the Bitcoin space, with USD 8.21 bln in convertible debt on its balance sheet and an annual interest expense of just USD 34.6 mln. 21 Capital appears to be following a similar playbook while bringing its own innovations to the financial structure.

Current valuation: A premium play

For investors considering an entry into CEP ahead of its transformation into XXI, understanding the current valuation metrics is critical. Based on the recent trading price of approximately $31.50 per share, the company is being valued at around $12 billion. With 42,000 Bitcoin valued at approximately $4 billion, this represents a significant premium of approximately 3x over the net asset value (NAV) of the Bitcoin holdings.

This premium indicates that investors are already pricing in substantial future Bitcoin acquisition and operational growth beyond the initial holdings. Compared to Strategy, which currently trades at a premium of 2.223x to its Bitcoin NAV, 21 Capital’s 3x premium suggests higher market expectations for its growth trajectory and execution capabilities.

This valuation premium demonstrates the market’s enthusiasm for purpose-built Bitcoin treasury companies and creates immediate pressure on 21 Capital to execute its strategy effectively to justify this premium.

A Bitcoin-denominated mindset

At the heart of 21 Capital’s approach is a revolutionary shift in how corporate performance is measured and valued. The company is explicitly rejecting traditional fiat-based metrics in favor of a Bitcoin-denominated mindset. This represents a paradigm shift in corporate philosophy that measures success in Bitcoin rather than fiat currency, prioritizes Bitcoin accumulation over fiat profits, and evaluates all business decisions through the lens of Bitcoin optimization.

To operationalize this philosophy, 21 Capital has introduced two innovative performance metrics: Bitcoin Per Share (BPS) and Bitcoin Return Rate (BRR). BPS represents the amount of Bitcoin each fully diluted share represents, serving as the primary measure of shareholder value. BRR measures the rate at which Bitcoin per share grows over time, indicating the company’s efficiency in increasing shareholder Bitcoin exposure regardless of Bitcoin’s fiat price.

Strategy has pioneered similar metrics, currently reporting Bitcoin per share of 0.00183451 BTC for diluted shares and a Bitcoin yield of +15.65% year-to-date. These metrics have become essential for evaluating Bitcoin treasury companies’ performance beyond traditional financial measures.

This Bitcoin-centric approach creates a fundamentally different value proposition compared to both traditional companies and other Bitcoin-exposed investments. As 21 Capital states, it “is built to accumulate Bitcoin and grow ownership per share, not just track it.”

Strategic competitive advantages

21 Capital is explicitly positioning itself as a superior vehicle for Bitcoin exposure compared to existing options in the market. As a pure-play Bitcoin exposure company, it offers investors clearer exposure without the operational complexities or distractions of other business lines that might dilute the Bitcoin focus.

Unlike companies that have added Bitcoin to their balance sheets as an investment strategy, 21 Capital claims to be building “Bitcoin-native operations” from the ground up. This purpose-built approach enables more effective Bitcoin-focused operations tailored specifically to maximize Bitcoin accumulation and shareholder value.

The company also claims potential advantages in its debt structure and approach. Starting with a clean slate, 21 Capital can implement optimal debt strategies from inception, potentially creating innovations in how it structures financial leverage for Bitcoin acquisition.

The concentrated ownership by entities with significant Bitcoin ecosystem experience and resources creates what the company describes as advantageous insider alignment. This structure potentially enables more effective execution of the Bitcoin treasury strategy compared to companies with more distributed ownership.

These claims directly challenge Strategy’s leadership position, suggesting that 21 Capital’s purpose-built approach might create advantages over Strategy’s evolution from a software company to a Bitcoin treasury company.

Beyond Bitcoin accumulation: Secondary business initiatives

While Bitcoin accumulation remains the core focus, 21 Capital has outlined several additional business verticals that extend its value proposition. The company plans to accelerate Bitcoin adoption and literacy through educational content development, media production, and strategic partnerships. This educational focus positions 21 Capital not just as a Bitcoin holder but as an active participant in expanding the Bitcoin ecosystem.

A potentially significant operational expansion involves the development of Bitcoin-related financial and advisory services. These could include guidance to institutions on Bitcoin adoption strategies, Bitcoin-related debt and equity structured products, and potentially Bitcoin-related lending services. These financial services could create additional revenue streams while leveraging the company’s Bitcoin holdings and expertise.

The SEC filing reveals that Tether and 21 Capital will enter into a Services Agreement at closing, with Tether providing certain services to 21 Capital and its subsidiaries in exchange for a services fee of $30,000 per calendar quarter. This arrangement further leverages Tether’s expertise and infrastructure to support 21 Capital’s operations.

The company’s emphasis on “Bitcoin-native operations” suggests the development of operational capabilities uniquely suited to a Bitcoin-centric business environment, potentially creating first-mover advantages in emerging Bitcoin-focused financial services.

Strategy has been moving in a similar direction, gradually positioning itself as a Bitcoin financial services company beyond just holding Bitcoin. The emergence of 21 Capital creates competition in this nascent space, potentially accelerating innovation in Bitcoin-native financial services.

Key risks that investors should consider

Despite its promising positioning, investing in 21 Capital involves significant risks that merit careful consideration. The formation of the company depends on the successful completion of the SPAC merger, which faces regulatory approval uncertainties, potential timeline delays, and the possibility of transaction modifications. In the event the SPAC merger is not completed, CEP shares would likely revert to approximately $10 per share, representing significant downside from current trading prices.

The dual-class share structure presents additional governance risks for public investors. With Class A shares carrying no voting rights, public shareholders will have no formal say in company decisions, including board composition, executive compensation, or strategic direction. This control concentration may lead to decisions that prioritize controlling shareholders’ interests over those of public investors.

The appropriate valuation for 21 Capital involves substantial uncertainty given the limited comparable companies and the novel nature of its business model. The current trading of CEP shares exhibits characteristics that create valuation concerns, including extreme volatility, limited liquidity, and potentially speculative trading dynamics.

Several aspects of the company’s leadership and operational structure present uncertainties. The CEO’s dual role leading both 21 Capital and another Bitcoin-focused company raises questions about time allocation and potential priority conflicts. The company’s operational economics, including burn rate, expense structure, and capital allocation balance, remain largely undefined.

Technical implementation risks are also significant. The security of substantial Bitcoin holdings presents critical considerations around private key management, multi-signature implementation, and cold storage protocols. The company’s financial engineering activities carry execution risks related to debt structuring, market timing, and liquidity management.

These risks contrast with Strategy’s established operational track record, though Strategy faces its own set of execution risks around its growing leverage and ambitious Bitcoin acquisition targets.

How it compares to Bitcoin investment alternatives

For investors weighing their Bitcoin exposure options, 21 Capital presents a unique risk-reward profile compared to alternatives.

Versus direct Bitcoin ownership

21 Capital offers professional management, access to capital markets, and business development potential, but comes with corporate expenses, execution risk, share dilution, and premium pricing that must be justified through performance.

Compared to Strategy

21 Capital brings a Bitcoin-native design, strong institutional backers, and a fresh start unencumbered by legacy operations. However, it lacks Strategy’s proven track record, trades at a higher initial premium than Strategy’s 2.223x to NAV, and has more concentrated ownership and governance that may raise concerns for some investors.

Against Bitcoin ETFs

21 Capital potentially offers growing Bitcoin per share, business upside potential, and active management benefits. These advantages come with higher operational complexity, execution risk, and potential dilution that ETF investors don’t face.

Relative to Bitcoin miners

21 Capital presents a more focused strategy with simpler operations and less capital-intensive structure, but lacks the Bitcoin production capability that can benefit miners during bull markets.

Making the investment decision: A practical framework

For investors considering a position in 21 Capital, aligning your time horizon with the company’s developmental path is critical:

• Short-term investors (0-2 years) should recognize the highly speculative nature of the investment given all the uncertainties around SPAC completion and initial operations.
• Medium-term investors (2-5 years) will find their success dependent on the company’s ability to execute its Bitcoin acquisition strategy efficiently.
• Long-term investors (5+ years) may find their timeframe best aligned with the company’s vision and development trajectory.

Your conviction about Bitcoin itself should significantly influence your approach. Without strong belief in Bitcoin’s long-term value proposition, the investment case for 21 Capital weakens considerably. The 3x premium over Bitcoin value requires significant value creation beyond simply holding Bitcoin—either through efficient accumulation or successful development of additional business lines.

Given the various risk factors, including execution uncertainty, premium compression risk, Bitcoin price volatility, regulatory uncertainties, and potential share dilution, most investors should consider conservative position sizing when approaching 21 Capital. This might involve starting with a small position and building it as the company demonstrates successful execution of its strategy, or including it as part of a diversified Bitcoin exposure strategy alongside direct Bitcoin holdings, Strategy shares, or Bitcoin infrastructure investments.

What to watch going forward

For investors who take a position in 21 Capital, monitoring several key indicators will be important for evaluating the company’s progress:

1. Bitcoin acquisition efficiency: The growth in Bitcoin per share (accounting for dilution) will be the most fundamental metric of success.

2. Capital raising capability: The company’s ability to raise capital efficiently while maintaining or expanding its premium to NAV will directly impact its core metric.

3. Business development milestones: Progress in launching Bitcoin-focused business lines, key executive and team hiring announcements, and new Bitcoin-native financial product introductions will provide insights into execution capabilities beyond simple Bitcoin accumulation.

4. Ownership changes: Any significant shifts in insider ownership, leadership structure, or strategic direction should be carefully evaluated, particularly given the lock-up agreements in place for initial shareholders.

5. Competitive dynamics with Strategy: The interaction between 21 Capital and Strategy in capital markets, Bitcoin accumulation rates, and innovative financial instruments will shape both companies’ trajectories.

The big picture: Why 21 Capital matters

Beyond the immediate investment considerations, 21 Capital represents a significant development in corporate Bitcoin adoption. With its substantial Bitcoin holdings, strong institutional backing, and ambitious vision, the company embodies the growing recognition of Bitcoin’s strategic importance in corporate finance.

The formation of a purpose-built Bitcoin treasury company at this scale—backed by major players from both cryptocurrency and traditional finance—signals a potential acceleration in institutional Bitcoin adoption. 21 Capital’s approach, combining aggressive Bitcoin accumulation with Bitcoin-native business development, may establish new models for how corporations integrate Bitcoin into their financial strategies.

For Strategy, 21 Capital’s emergence represents both validation of its pioneering approach and a competitive challenge to its dominant position. The competition between these Bitcoin treasury giants may accelerate innovation in the space, ultimately benefiting both companies’ shareholders and the broader Bitcoin ecosystem.

For investors, 21 Capital presents a complex opportunity with both significant potential upside and considerable risks. Those who believe in the long-term vision of Bitcoin becoming increasingly central to the global financial system may find 21 Capital’s approach compelling, particularly if the company can execute effectively on its ambitious strategy.

Whether 21 Capital fulfills its vision remains to be seen, but its emergence already signals an important milestone in Bitcoin’s journey from a niche alternative asset to a mainstream financial consideration for both corporations and investors. As this story unfolds, watching how effectively 21 Capital executes against its bold vision—and how Strategy responds to this new competitor—will provide valuable insights into the evolving relationship between Bitcoin and corporate finance.