Through a new vehicle called Cantor Equity Partners, the firm raised $200 million back in January with a grand plan: launch 21 Capital, a fresh crypto-centric operation that will reportedly receive $3 billion worth of Bitcoin from a who’s-who of digital asset players.
At the top of the list? Tether — the stablecoin issuer with a shadowy reserve structure that’s inspired more conspiracy theories than a season of X-Files. Tether is set to contribute a jaw-dropping $1.5 billion in BTC. Where’s it coming from? Their reserves? Their own portfolio? No one knows — and no one’s asking, apparently.
SoftBank — yes, the same SoftBank that brought us WeWork and a string of eye-watering tech flops — is joining in with $900 million. Bitfinex, which conveniently shares leadership (and possibly bank accounts) with Tether, is adding $600 million. That rounds out the initial $3 billion pile of Bitcoin, which will reportedly be used as collateral for… surprise surprise, more financial engineering.
Lutnick’s plan includes issuing a $350 million convertible bond and securing an additional $200 million in equity to buy even more Bitcoin. The whole thing smells like a hybrid between MicroStrategy’s debt-for-BTC binge and an altcoin ICO whitepaper, but with more suits and fewer memes.
Here’s the kicker: the Bitcoin backing this operation will eventually be converted into equity in 21 Capital, priced at $10 per share, valuing BTC at a cool $85,000 per coin. So not only are we issuing bonds backed by Bitcoin, but we’re also baking in a moonshot valuation. Because when it comes to crypto, it’s go big or rug pull.
In a sense, this isn’t entirely different from what Michael Saylor has been doing — except instead of hodling BTC on a corporate balance sheet, 21 Capital is using it as a shiny golden key to unlock debt, equity, and presumably more BTC. The main difference? MicroStrategy owns their coins outright. Here, we’re dealing with borrowed trust, synthetic ownership, and the ever-enigmatic Tether.
If this sounds like a circular bet on Bitcoin going vertical — because it absolutely is.
And just like every other grand experiment in high-finance-meets-crypto alchemy, it works perfectly… until it doesn’t.