Cantor Fitzgerald, Tether Holdings, and the SoftBank Group are in discussions about creating a $3 billion company that will absorb billions of dollars in Bitcoin. The vehicle is designed to build on the success of Michael Saylor's (Micro-)Strategy.
Before entering Bitcoin, Strategy (formerly MicroStrategy) was primarily a business intelligence and analytics software company, offering tools for data-driven decision-making and corporate reporting. However, since 2020, Strategy has aggressively raised debt to acquire Bitcoin. The company has transformed into a quasi-Bitcoin hedge fund and now holds $50 billion in cryptocurrency—around 2.5% of the total supply. With its bold strategy, Michael Saylor's firm catapulted its valuation into the Top 100 of U.S. stocks. The three heavyweights Cantor, Tether, and SoftBank aim to replicate this success through their own joint venture, as reported by the Financial Times.
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Multibillion-dollar Bitcoin vehicle
Cantor Equity Partners I Inc., a special purpose acquisition company (SPAC), raised $200 million in capital in January and will use this funding to establish a new company. The new venture will be called 21 Capital—a reference to Bitcoin's maximum supply of 21 million. Stablecoin giant Tether will contribute $1.5 billion in Bitcoin, while Tether-linked exchange Bitfinex and SoftBank plan to provide $600 million and $900 million worth of cryptocurrency, respectively. The deal could be announced in the coming days, according to the FT source.
The deal is comparable to Michael Saylor's Strategy business model. In recent years, imitators have emerged globally, including the Japanese company Metaplanet. Their purchases are typically financed through the sale of stocks and other financial instruments, including convertible bonds. Once the merger is completed, the Cantor vehicle will issue a convertible bond of $350 million and a separate private placement of shares worth $200 million to acquire additional Bitcoin. This aims to create a publicly traded alternative to Strategy.
High-profile consortium
The initiative is led by Brandon Lutnick, who was appointed chairman of the brokerage house Cantor Fitzgerald after his father stepped down to become Trump's Secretary of Commerce. The company has been helping Tether manage its reserves for years and holds a convertible bond from the stablecoin operator. Brandon is also the CEO and chairman of the SPAC. The proximity to the Trump administration could be beneficial for the project.
If the deal goes through, another Bitcoin supply shock may be on the horizon. Michael Saylor's Strategy plans to raise over $42 billion and invest it in Bitcoin by 2027. If the new competitor also acquires billions in Bitcoin, upward pressure on the Bitcoin price will likely increase.
