Institutions Invest $3B in Bitcoin

Brandon Lutnick is leading a $3 billion investment in Bitcoin via Cantor Fitzgerald, collaborating with SoftBank, Tether, and Bitfinex to establish a company called 21 Capital. The goal is to follow MicroStrategy’s example by holding Bitcoin as a long-term treasury asset to appreciate over time. This move highlights the increasing participation of institutions in Bitcoin, fueled by positive market sentiment, rising demand, and decreasing circulation.

Lutnick, son of US Commerce Secretary Howard Lutnick, is forming a special purpose acquisition company (SPAC) called Cantor Equity Partners, which raised $200 million in January. This entity will create 21 Capital, designed to absorb a $3 billion Bitcoin investment from various crypto investors and trading firms. Tether plans to contribute $1.5 billion worth of Bitcoin, while SoftBank and Bitfinex will add $900 million and $600 million, respectively. These firms are interconnected through shared ownership and leadership.

In addition to Bitcoin contributions, Cantor Equity Partners intends to raise $350 million through convertible bonds and conduct a $200 million private equity placement to expand its Bitcoin holdings further. The plan is for SoftBank, Tether, and Bitfinex to eventually convert their Bitcoin investments into shares of 21 Capital at $10 per share, valuing each Bitcoin at approximately $85,000.

While this deal is expected to be announced soon, there remains a possibility it may not materialize or that figures could change. This strategy mirrors MicroStrategy’s approach of issuing stock and debt to amass billions in Bitcoin, which has significantly boosted its market value. Several other companies are now showing interest in Bitcoin, reflecting its growing acceptance as a strategic asset. This trend is generally positive for Bitcoin, suggesting potential long-term stability and growth, although short-term market fluctuations may continue as the institutional involvement increases.