SoftBank Takes Bold Step into Crypto with Twenty One Capital
By Pranav Kiran
April 25, 2025 11:59 AM UTC
In a striking move that underscores its penchant for high-risk investments, SoftBank, the Japanese investment giant known for its controversial stake in WeWork, has cemented its presence in the cryptocurrency sector. This week, the company announced its involvement in a new venture, Twenty One Capital, alongside notable industry players, further igniting the ongoing crypto excitement.
The Launch of Twenty One Capital
On April 23, a coalition of cryptocurrency pioneers revealed the launch of Twenty One Capital, which aims to capitalize on the current cryptocurrency craze. The initiative is set to go public through a merger with the special-purpose acquisition company (SPAC) Cantor Equity Partners, headed by Brandon Lutnick, son of former Commerce Secretary Howard Lutnick.
As a notable aspect of this collaboration, Tether, a leading stablecoin issuer, and Bitfinex, a well-known cryptocurrency exchange, will contribute a substantial holding of bitcoins to the new venture. With an expectation to start with more than 42,000 bitcoins, valued at approximately $4 billion based on current market prices, the company aims to position itself as a significant player in the cryptocurrency market.
SoftBank’s Strategic Investment
In addition to the bitcoin contributions from Tether and Bitfinex, SoftBank is contributing cash to the venture. Reports indicate that SoftBank’s equity investment will equate to the value of 10,500 bitcoins, approximately $891 million at a recent 10-day average price of $84,864. This investment could potentially yield rewards for the conglomerate if Twelve One Capital trades at a premium similar to Strategy, another prominent Bitcoin investment vehicle operated by Michael Saylor.
Despite the alluring potential for high returns, analysts highlight the inherent volatility and risks associated with such an investment strategy. Since the introduction of the Bitcoin-backed SPAC, there have been concerns about liquidity and the dilution of shareholders’ equity, particularly given the trend of SPACs trading below their initial offering prices.
The Volatility of Cryptocurrency Investments
SoftBank’s foray into the cryptocurrency market can be seen as a reflection of its broader investment philosophy — one that is often characterized by daring and sometimes contentious decisions. The recent performance of the Cantor Equity Partners’ shares, which have nearly tripled since the deal’s announcement, might suggest a promising outlook. However, there are stark reminders of the unpredictable nature of cryptocurrencies and associated investments.
While strategies like those employed by Michael Saylor’s Strategy often attract hedge funds eager to benefit from Bitcoin’s volatile trajectory, they also carry risks for traditional investors. Earnings metrics for crypto-backed investments can be misleading, as these assets don’t generate traditional cash flows, further complicating the investment landscape.
Conclusion
As SoftBank continues to navigate the high-stakes world of cryptocurrency through its partnership with Twenty One Capital, industry watchers will be closely monitoring how this venture unfolds amid a backdrop of market volatility. With SoftBank’s history of bold moves in uncertain territory, this latest foray into the crypto space could either pay off spectacularly or serve as another cautionary tale in the fluctuating world of digital currencies.
For those interested in the evolving financial landscape, the developments surrounding Twenty One Capital and SoftBank’s approach may provide crucial insight into the intersection of traditional finance and emerging crypto opportunities.
Headline: SoftBank Takes Bold Step into Crypto with Twenty One Capital
Byline: By Pranav Kiran, Reuters
Date: April 25, 2025
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