Tether Investments on April 29 proposed merging its publicly listed Bitcoin treasury vehicle Twenty One Capital (NYSE: XXI) with Strike, a Bitcoin financial services platform operating in 100+ countries, and Elektron Energy, a private mining operator running approximately 50 EH/s of hashrate. If ...
"Simply put, I think it's a great idea." — Jack Mallers, CEO, Twenty One Capital & Strike
Tether Investments on April 29 proposed merging its publicly listed Bitcoin treasury vehicle Twenty One Capital (NYSE: XXI) with Strike, a Bitcoin financial services platform operating in 100+ countries, and Elektron Energy, a private mining operator running approximately 50 EH/s of hashrate. If completed, the three-way combination would create a single listed entity spanning Bitcoin treasury holdings of 43,514 BTC, large-scale mining at sub-$60,000 all-in production cost, consumer payments, and a $2.1 billion lending facility. XXI shares rose 8% in after-hours trading on the announcement.
The proposal arrives as Tether itself confirmed holdings of more than 140,000 BTC and reported net profit exceeding $10 billion for 2025 on $141 billion in U.S. Treasury exposure. The move signals a structural shift in how stablecoin profits are being redeployed: not into traditional finance, but into vertically integrated Bitcoin infrastructure accessible via public equity markets.
The proposed combination proceeds in two sequential mergers. Twenty One Capital would first acquire Strike, then the combined entity would merge with Elektron Energy. No financial terms, exchange ratios, or timelines have been disclosed. Tether Investments, as majority shareholder of XXI, stated it intends to vote in favor of both transactions and recommend Raphael Zagury, founder and CEO of Elektron, as President of the combined company.
The merged entity would operate across four verticals:
| Vertical | Source Entity | Core Asset | |---|---|---| | Treasury | Twenty One Capital | 43,514 BTC ($3.16B at current prices) | | Mining | Elektron Energy | ~50 EH/s, >5,500 BTC mined to date | | Financial Services | Strike | Payments in 100+ countries, $2.1B credit facility | | Lending | Strike | Bitcoin-backed loans with proof-of-reserves |
Tether Investments described the rationale in its press release: "If consummated, the transactions would allow the combined entity to leverage a strong balance sheet, a large-scale profitable operating business, and a financial services division built to spearhead Bitcoin adoption."
XXI debuted on public markets in December 2025 via a SPAC merger with Cantor Equity Partners, backed by Tether ($1.6 billion in bitcoin), Bitfinex ($600 million), and SoftBank ($900 million). The company's founding thesis centered on maximizing Bitcoin ownership per share (BPS), a metric borrowed from Strategy's (MSTR) playbook.
As of April 29, 2026, XXI holds 43,514 BTC, making it the third-largest public corporate Bitcoin holder behind Strategy (818,334 BTC) and Metaplanet (40,177 BTC, though XXI surpasses it in total BTC). XXI trades at approximately $8.15 per share with a market capitalization of roughly $2.14 billion — implying the stock trades at a discount to its net Bitcoin value of approximately $3.16 billion.
The NAV discount is notable. XXI's market cap sits at roughly 68% of its Bitcoin holdings' market value, a sharp contrast to Strategy's historical premium. This discount may have accelerated Tether's push to add operating businesses that generate revenue independent of BTC price appreciation.
Founded by Jack Mallers, Strike provides Bitcoin buying, selling, custody, payments, and lending services. The company claims profitability and availability in over 100 countries. Key recent milestones:
Strike's lending product allows users to borrow against Bitcoin collateral without selling. The $2.1 billion credit facility positions the company to underwrite large institutional loans. Mallers has stated Strike sweeps a portion of its profits into Bitcoin through its own treasury.
Elektron is one of the world's largest private Bitcoin mining operators. Key operating metrics disclosed in the announcement:
At current Bitcoin prices near $78,000, Elektron's sub-$60,000 production cost implies a mining margin above 23%. The company's operational efficiency would provide the merged entity with a consistent BTC acquisition channel at below-market costs.
The merger proposal cannot be analyzed in isolation from Tether's financial position. The stablecoin issuer reported the following for 2025:
| Metric | Value | |---|---| | Net Profit | >$10 billion | | USDT Outstanding | $186.5 billion | | U.S. Treasury Exposure | $141 billion | | Excess Reserves | $6.3 billion | | Bitcoin Holdings | 140,000+ BTC (confirmed April 2026) | | Gold Reserves | $17.4 billion (~140 tons) | | Investment Portfolio | >$20 billion |
Tether's $10 billion annual profit exceeds the net income of many mid-cap U.S. banks. The company allocates up to 15% of realized operating profits to Bitcoin purchases, a policy in place since 2023. At $10 billion in annual profit, this implies up to $1.5 billion per year in additional BTC accumulation from Tether alone.
The investment portfolio — segregated from USDT reserves — spans AI, energy, media, fintech, agriculture, and digital asset treasury companies. Twenty One Capital is one such investment. The proposed merger would consolidate multiple Tether-affiliated Bitcoin assets into a single public vehicle.
The merger proposal lands amid an acceleration in corporate Bitcoin accumulation. The top public holders as of late April 2026:
| Company | BTC Holdings | Market Cap | Approx. mNAV | |---|---|---|---| | Strategy (MSTR) | 818,334 | ~$63.7B portfolio value | Premium | | Twenty One Capital (XXI) | 43,514 | ~$2.14B | 0.68x | | Metaplanet (3350.T) | 40,177 | — | — | | Semler Scientific (SMLR) | 5,048 | — | 0.88x |
Strategy dominates the category, holding over 60% of all publicly held corporate Bitcoin. The company added 3,273 BTC for $255 million in the week ending April 27 and has accumulated 818,334 BTC at an average cost of $75,537. Strategy finances purchases through a $21 billion ATM equity program and targets 5-7% of total Bitcoin supply.
Metaplanet, Japan's first publicly listed Bitcoin treasury company, acquired 5,075 BTC in Q1 2026 alone, reaching 40,177 BTC with an average cost basis near $97,000.
The Strive-Semler Scientific merger, announced separately, aims to create "the fastest growing corporate Bitcoin holder." These consolidation moves suggest the standalone Bitcoin treasury model — holding BTC and issuing equity — may be reaching its limits. Companies are adding operating businesses to justify valuations and generate cash flow independent of BTC spot price.
The merger's economic rationale rests on three pillars:
1. NAV Discount Closure. XXI trades at roughly 68 cents on the dollar relative to its BTC holdings. Adding revenue-generating businesses (Strike's payments and lending, Elektron's mining) provides earnings-based valuation support, potentially closing the gap between market cap and net asset value.
2. Vertical Integration of BTC Acquisition. Elektron's mining operation produces BTC below market price. Strike generates cash flow that can be converted to BTC. The treasury holds BTC. This creates a closed loop: mine it, earn it, hold it. Each vertical feeds the treasury without relying exclusively on equity dilution or debt issuance.
3. Stablecoin Profit Recycling. Tether earns $10 billion+ annually from USDT reserves invested in U.S. Treasuries. A portion of that profit flows into Bitcoin purchases. The merged XXI entity becomes the public-market expression of that capital cycle: stablecoin demand generates dollars, dollars earn yield, yield buys Bitcoin, Bitcoin sits in a listed treasury accessible to equity investors.
This structure creates a feedback loop between the dollar-denominated stablecoin economy and Bitcoin accumulation. As USDT supply grows (up ~$50 billion in 2025 alone), the capital base for Bitcoin purchases expands.
The proposed combination raises several regulatory questions:
Securities Law. The merger involves a NYSE-listed company acquiring two private entities. Standard SEC review applies. The Cantor Fitzgerald connection — Cantor's SPAC originally brought XXI public — adds a layer of scrutiny given Cantor's role as a Tether custodian.
Stablecoin Legislation. The U.S. Congress continues to debate stablecoin frameworks. The GENIUS Act and Stablecoin CEA Clarity Act remain under consideration. If passed, these could impose new reserve and disclosure requirements on Tether, potentially affecting the capital flows that fund XXI's Bitcoin purchases.
Mining Regulation. Elektron's global mining operations will bring energy policy and environmental compliance into the merged entity's regulatory profile.
Concentration Risk. Tether's dual role as XXI's majority shareholder and USDT issuer creates concentration. A material adverse event affecting Tether — regulatory action, reserve concerns, or a de-peg event — would directly impact XXI equity holders.
No regulatory approvals for the proposed mergers have been disclosed. Transaction timelines remain undefined.
The proposed three-way merger represents the most ambitious attempt to date to build a full-stack Bitcoin company within public equity markets. The economic logic is straightforward: Tether generates billions in stablecoin profits, allocates a portion to Bitcoin, and now seeks to package mining, lending, and payments around that treasury in a single listed vehicle.
Whether it works depends on execution. Strike must scale lending without credit losses. Elektron must maintain sub-$60,000 mining costs as difficulty adjusts. XXI must navigate the regulatory complexity of a Tether-controlled public company. And the entire structure remains correlated to Bitcoin's spot price.
The NAV discount tells one story: the market is not yet convinced that a Tether-backed Bitcoin company deserves a premium. The merger proposal is an attempt to change that equation by adding cash flow to what has been, until now, a leveraged Bitcoin bet with a corporate wrapper.