Key Takeaways
- Tether Investments unveiled plans to merge Twenty One Capital (XXI), Strike, and Elektron Energy
- XXI shares rallied more than 6% during after-hours trading on the news
- The proposed entity would combine Bitcoin holdings, mining operations, and payment services
- Jack Mallers would assume an executive position; Raphael Zagury proposed as company president
- Financial details and completion timeline remain undisclosed
Shares of Twenty One Capital (XXI) experienced a significant after-hours rally on Wednesday, climbing over 6% following an announcement from majority stakeholder Tether Investments regarding a proposed three-company merger involving Bitcoin payment processor Strike and mining operation Elektron Energy.
The equity had concluded regular trading down 1.7% at $7.83 but surged to an after-hours peak of $9.28 before stabilizing around $8.35.
According to Tether’s statement, the company plans to cast its XXI ownership stake in support of both proposed transactions. The initial deal would see XXI merge with Strike, while a subsequent agreement would incorporate Elektron Energy, establishing a comprehensive publicly-traded Bitcoin enterprise.
XXI has faced headwinds throughout the current year. Year-to-date performance shows a decline exceeding 10.5%, mirroring the broader downturn in Bitcoin valuations.
The firm’s current Bitcoin holdings stand at 43,514 BTC, positioning it as the second-largest corporate holder of the cryptocurrency. Only Strategy, Inc., with 818,334 BTC in reserves, surpasses this position.
Strategic Assets Each Partner Contributes
Strike would bring what Tether characterized as a financially successful payments infrastructure, complemented by worldwide distribution networks and established regulatory frameworks.
Elektron Energy would provide substantial Bitcoin mining capabilities. The operation controls approximately 5% of the Bitcoin network’s aggregate computational capacity, with reported all-inclusive production expenses under $60,000 per Bitcoin.
The consolidated organization would unite Bitcoin treasury management, mining infrastructure, payment processing, lending services, and capital market functions within a single public entity.
“These combined deals would transform XXI from a pure treasury play into a comprehensive platform featuring active business operations, sustainable revenue streams, and enhanced long-term Bitcoin acquisition potential,” Tether stated in its announcement.
Proposed Executive Framework
Tether has put forward Elektron’s founder and chief executive Raphael Zagury for the position of president in the unified organization.
Jack Mallers, who serves as both Strike’s founder and CEO as well as XXI’s co-founder and chief executive, would maintain an executive capacity within the merged corporation.
Tether characterized this arrangement as merging “Mallers’ innovation, branding, and consumer-focused Bitcoin expertise with Zagury’s capital markets acumen, operational proficiency, and execution capabilities.”
Additional leadership details were not revealed.
XXI completed its public market debut in December via a SPAC combination with Cantor Equity Partners. The company launched with backing from Tether, Bitfinex, and Mallers, establishing its mission as capital-efficient Bitcoin acquisition.
Should both mergers proceed as outlined, that founding objective would broaden substantially beyond merely accumulating Bitcoin on corporate books.
Tether has not revealed monetary terms or an anticipated completion schedule for either proposed transaction.
