Twenty One Capital’s NYSE debut sees 20% fall – What scared investors?

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Well, well, well, the much-anticipated debut of Twenty One Capital on the New York Stock Exchange (NYSE) had all the fanfare of a Hollywood blockbuster, but unfortunately, it turned out to be more of a “flop” than a “hit.” 🎬

Trading under the ticker XXI (because, of course, we’re in the future), Twenty One Capital is a Bitcoin-native firm that’s got the big boys like Tether, Bitfinex, and SoftBank in its corner. I mean, when you’ve got SoftBank backing you, you should probably be celebrating with champagne, right? 🍾

But, plot twist: on 09 December, the stock took a dive, plummeting nearly 20%. Ouch! That’s like being told your investment in a shiny new car just depreciated faster than you can say “recession.” The drop followed the completion of its SPAC merger with Cantor Equity Partners.

CEO Jack Mallers on Twenty One Capital

CEO Jack Mallers (aka the brave soul who thought this would work) insists that his company is building more than just a Bitcoin hoard. According to him, it’s all about creating “utility services” and a corporate architecture for fresh, new financial products. Well, that’s what he said on the record. But does anyone actually believe him? 🧐

Despite his hopeful remarks, the stock opened at $10.74 and closed at $11.42 – I’m not saying it’s bad, but it’s not exactly a blockbuster debut either. Wall Street seems to be doing more than just pricing in the usual crypto drama; they’re practically sending out an SOS signal. 🚨

“Yes, we own a lot of bitcoin. Yes, we’re going to acquire as much as we possibly can, but we’re also about to launch a ton of business lines and produce profit that’s related to bitcoin, and that’s a lot of why we created the company in the first place.”

What impact did it have?

Clearly, this is no small potatoes. The drop in stock price hinted at a fascinating paradox in valuation. It’s like owning a goldmine but being paid in Monopoly money. The company’s core asset, a massive Bitcoin treasury, is worth more than $3.97 billion. Yep, you read that right – billion with a “B.” So why’s the stock trading at a huge discount? Well, the answer is in the market’s cautious mood towards crypto-linked stocks. 🏦

And then there’s the deal structure. A SPAC merger with Cantor Equity Partners (CEP), a Special Purpose Acquisition Company backed by Cantor Fitzgerald, led by Brandon Lutnick. This is basically the financial equivalent of saying “I have connections.” But, those connections didn’t stop the stock from taking a nosedive. 📉

CEP’s stock surged by a jaw-dropping 380% earlier this year when the merger was announced, but the market’s reaction is more like a cold shower. Oh, and did I mention Bitcoin itself has dropped over 28% since October? Yeah, not exactly helping the situation. 🙄

Harder and harder for DATs…

The debut of Twenty One Capital also comes at a time when the entire Digital Asset Treasury (DAT) sector is under the microscope. Investors are now obsessing over the ‘mNAV’ (market-to-NAV) ratio, a key metric that reflects a company’s value relative to its crypto holdings. This isn’t just some quirky financial term – it’s the stuff that keeps market analysts up at night. 😴

John Todaro, Senior Research Analyst at Needham, chimed in with some tough love: “It’s becoming harder for DATs to raise capital, and now they need to show real differentiation to get those high multiples they once had.” Translation: No more free rides, folks! 🏃‍♂️💨

The debut of Twenty One Capital is just the latest nail in the coffin for the “leveraged Bitcoin Treasury” model. Seems like that honeymoon is officially over, and reality has come knocking on the door. 🏚️

But wait, the plot thickens!

How are other Bitcoin firms doing?

Metaplanet in Japan and Strategy are also feeling the heat, caught in the same mNAV crunch. Metaplanet is pausing Bitcoin purchases, even as prices dip. And what does it do next? Pulls out a frantic $500 million credit line for stock buybacks. Classic move. 🤷‍♂️

Strategy, on the other hand, raised a cool $1.44 billion in equity to calm the FUD (Fear, Uncertainty, and Doubt, for those not in the know) and double down on its “never sell” philosophy. Guess what? The market’s still skeptical. 🙄

Final Thoughts

  • Twenty One Capital’s NYSE debut? More like a cautionary tale about the volatile world of crypto-linked stocks. 😬
  • The disconnect between Bitcoin’s price and the company’s stock price is growing, and Wall Street is watching closely. 👀

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2025-12-11 10:39