Stay informed with free updates
Simply sign up to the Cryptocurrencies myFT Digest — delivered directly to your inbox.
Brandon Lutnick, son of US commerce secretary Howard Lutnick, is partnering with SoftBank, Tether and Bitfinex on a bitcoin acquisition vehicle to capitalise on a cryptocurrency revival under US President Donald Trump.
The consortium announced on Wednesday that it was creating a multibillion-dollar bitcoin acquisition vehicle called Twenty One Capital that will absorb billions in cryptocurrency from the other partners with the aim of buying up more bitcoin. Earlier on Tuesday, the Financial Times reported that a deal was near.
The vehicle will launch with 42,000 bitcoin, making it the third biggest reserve of the cryptocurrency globally. It will be formed from a reverse merger with the younger Lutnick’s special purpose acquisition vehicle — Cantor Equity Partners, which raised $100mn last year — with the aim of finding a target company.
Twenty One Capital plans to use the funds in an effort to replicate a path taken by MicroStrategy, a one-time software company whose shares surged after pivoting to cryptocurrency investing. The deal values the vehicle at $3.6bn including debt, based on a bitcoin price of $85,000, Twenty One Capital said on Wednesday.
The vehicle is an attempt by Brandon Lutnick, who was named chair of brokerage Cantor Fitzgerald when his father stepped down to become Trump’s top trade envoy, to be at the centre of a crypto investment boom.
MicroStrategy has captured attention on public markets after it began issuing stock and speculative debt to purchase a massive stockpile of bitcoin. The company now holds tens of billions of dollars in bitcoin and has a market capitalisation of $91bn.
Cantor Equity Partners is seeking to create a publicly listed alternative alongside some of the industry’s biggest, and often most controversial, traders of crypto.
Tether will contribute at least $1.5bn worth of bitcoin, while SoftBank and Bitfinex will contribute the remainder of the digital currency, according to two people familiar with the matter. Tether and Bitfinex are owned by the same parent company and share some of the same leadership.
Lutnick’s Spac will also raise a $385mn convertible bond and a separate $200mn private placement of equity to buy additional bitcoin. Eventually, SoftBank, Tether and Bitfinex will see their investment of bitcoin converted into shares in Twenty One Capital at $13 a share for the private placement and $10 a share for the convertible bond.
In 2021, Tether and Bitfinex settled large regulatory investigations with the New York state attorney-general and the Commodity Futures Trading Commission.
The Trump administration has promised a more accommodative stance to cryptocurrency trading.
Cantor Fitzgerald has already been a beneficiary, advising on Tether’s $775mn investment in rightwing video-sharing company Rumble.
Bitcoin’s price peaked at about $106,000 in the month after Trump’s election win in November, but seesawed in the following months and is now trading at almost $93,000 a coin. MicroStrategy’s share price has fallen by 27 per cent from its record high close in November.
Shares in Cantor Equity Partners jumped 24 per cent on Wednesday morning.
Lutnick said in statement on Wednesday that the vehicle was “designed to help investors capture value from bitcoin’s growing global demand and increasing institutional adoption”.
Twenty One Capital will be run by Jack Mallers, a crypto executive behind bitcoin buying platform Strike.
The crypto tie-up is the first in a potential wave of Spac deals led by Cantor Fitzgerald. In addition to its Cantor Equity Partners Spac, it has created two other such vehicles led by the younger Lutnick that are hunting for deals, which also witnessed a jump in their share prices early on Wednesday.
The brokerage has also underwritten a handful of Spacs in recent months issued by third parties.
