Twenty One claims it can outperform Strategy as a vehicle for bitcoin

A new player has entered the field of bitcoin accumulation, challenging the dominance of Michael Saylor’s Strategy. Twenty One, a company backed by Tether, SoftBank Group, and Strike CEO Jack Mallers, is gearing up to offer what it believes to be a superior vehicle for investors seeking exposure to bitcoin. Unlike Strategy, Twenty One is not aiming to simply replicate Saylor’s approach but has its own unique strategy in mind.

With a moniker inspired by bitcoin’s capped supply of 21 million, Twenty One is set to make its debut on the Nasdaq with the ticker symbol XXI. The company plans to kick off with over 42,000 bitcoin in its treasury, making it the third-largest holder of the digital currency globally, behind Strategy and MARA Holdings. Tether and Bitfinex will dominate the ownership of Twenty One post-merger with Cantor Equity Partners, signaling a significant presence of industry heavyweights in the venture.

One of the primary reasons cited by Twenty One for claiming superiority over Strategy is the concern for potential diminishing returns due to the immense size of Michael Saylor’s bitcoin holdings. The company also emphasizes the flexibility it would have in raising capital thanks to its streamlined balance sheet. Another advantage highlighted by Twenty One is the management structure it has in place, with partners like Cantor Fitzgerald ensuring a level of transparency and institutional-grade design uncommon in Strategy’s setup, according to Fei Chen, CEO of Intellectia AI.

Twenty One’s ability to cater to a wider range of investors, including retail and RIAs seeking direct exposure to bitcoin without entangling themselves in tech-company-related risks and debt strategies, could prove to be a differentiating factor. However, analysts at TD Securities view the new entrant as a validation of Strategy’s operations rather than a threat, underscoring a bullish sentiment towards Saylor’s brainchild. They have generously assigned a “buy” rating to Strategy, with a price target well above the current trading price.

While the entry of Twenty One might create some ripples in the market, as competition grows and demand increases with another significant buyer in the mix, the impact on bitcoin’s price remains uncertain. Two Prime CEO Alexander Blume notes that the unique offering of a publicly traded stock as opposed to direct bitcoin purchases might temper any immediate price fluctuations in the market. Meanwhile, Michael Saylor seems unfazed by the latest development, staying focused on the long game with the mantra that the initial $100 billion is the toughest milestone to achieve.