TLDR
- Cantor Fitzgerald is launching a $3 billion Bitcoin acquisition vehicle called 21 Capital
- Partners include Tether ($1.5B), SoftBank ($900M), and Bitfinex ($600M)
- The venture will be led by Brandon Lutnick, son of US Commerce Secretary Howard Lutnick
- 21 Capital will also raise $350M in convertible bonds and $200M in private equity
- The model appears to mirror MicroStrategy’s Bitcoin accumulation strategy
Cantor Fitzgerald is teaming up with Tether, SoftBank, and Bitfinex to launch a $3 billion Bitcoin acquisition vehicle called 21 Capital. The venture aims to create a publicly traded firm that will directly hold Bitcoin, giving investors exposure to the cryptocurrency’s performance.
According to a Financial Times report, Tether has committed $1.5 billion in Bitcoin to the venture. Japanese investment giant SoftBank will contribute $900 million, while cryptocurrency exchange Bitfinex will add $600 million.
The project will be led by Brandon Lutnick, recently appointed chair of Cantor Fitzgerald and son of US Commerce Secretary Howard Lutnick. The elder Lutnick serves as Chairman of Cantor Fitzgerald, a brokerage that has shown increasing interest in Bitcoin and cryptocurrencies.
Structure and Investment Strategy
Beyond the initial $3 billion in Bitcoin contributions, 21 Capital plans to raise additional funds. This includes a $350 million convertible bond and a separate $200 million private equity round, which will be used to purchase even more Bitcoin.
Contributing firms are expected to receive equity in 21 Capital at a valuation pegging Bitcoin at $85,000 per coin. Though the deal is subject to change, sources familiar with the matter indicate it may be announced in the coming weeks.
The venture appears to be following a model similar to MicroStrategy, which has leveraged debt and equity to accumulate over 530,000 BTC worth $36.4 billion. However, MicroStrategy’s share price has dropped 20% from record highs reached in November.
Syncracy Capital co-founder Ryan Watkins described Cantor’s new venture as “another MicroStrategy clone.” He warned that such moves to accumulate Bitcoin could trigger bubble behavior that may lead to unwindings in the future.
Previous Crypto Ventures
This isn’t Cantor Fitzgerald’s first foray into the cryptocurrency space. The company has previously launched a $2 billion Bitcoin financing business, partnering with Anchorage for custody services.
Cantor also manages Tether’s reserves, with the stablecoin issuer indicating interest in investing in Cantor’s Bitcoin financing business. More recently, Cantor advised Tether on its $775 million investment in video-sharing platform Rumble.
SoftBank’s decision to participate follows its Tokyo-based subsidiary Metaplanet’s steady Bitcoin acquisition spree. This marks a major move for the Japanese investment giant into the cryptocurrency sector.
Political and Regulatory Context
The formation of 21 Capital comes as the Trump administration signals a friendlier stance toward cryptocurrency policy. Some observers, like crypto lawyer John Deaton, suggest the move aligns with President Trump’s decision to launch a Strategic Bitcoin Reserve.
Trump’s executive order reportedly mandates Commerce Secretary Howard Lutnick and Treasury Secretary Scott Bessent to acquire Bitcoin in budget-neutral ways. This creates a potentially favorable political environment for ventures like 21 Capital.
Paul Atkins, the new Securities and Exchange Commission chairman, is expected to fast-track regulatory clarity and enact policies promoting crypto innovation. This comes despite Tether and Bitfinex’s past regulatory settlements.
Bitcoin price responded positively to news of the venture, climbing to a two-week high of $93,000. However, some market observers express concern that the rally might be unsustainable, with potential drops to $80,000 possible.
The launch of 21 Capital represents a major institutional move into Bitcoin during what backers see as a renewed crypto bull market under the Trump administration. The venture is expected to proceed in the coming weeks, though final details remain subject to change.
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