Digital Asset Vaults Lose Their Luster: Twenty One's Stock Plunges 20% on First Trading Day
Twenty One Capital plummeted about 20% on its first day on the New York Stock Exchange, reflecting the valuation pressures and profit model uncertainties faced by Bitcoin vault companies, as the high volatility of the cryptocurrency market becomes more pronounced. Even with massive Bitcoin holdings and strong investment backing, investors remain cautious.
On its first day of trading on the New York Stock Exchange, the Bitcoin vault company Twenty One Capital, backed by Tether and SoftBank, saw its stock plunge about 20%, facing a sell-off at the open as investors questioned its valuation and clear business path. The company holds approximately 43,500 Bitcoin (BTC) reserves, but Bitcoin has fallen over 25% since touching a high of around $126,000 in October, putting pressure on the "digital asset vault" model centered on crypto assets and cooling investor sentiment.
This article analyzes the market environment behind Twenty One's first-day plunge, the company's valuation structure, and future risks.
Who is Twenty One?
Twenty One Capital is a "Bitcoin vault company" with Bitcoin as its core asset, aiming to hold large amounts of Bitcoin long-term and provide investors with a regulated Bitcoin exposure. The company is supported by Tether, Bitfinex, and the SoftBank Group, with Strike founder Jack Mallers serving as CEO.
Twenty One officially merged with SPAC company Cantor Equity and listed on the New York Stock Exchange this Tuesday. Based on its Bitcoin holdings, the company is already the world's third-largest listed Bitcoin holding institution, after Strategy and MARA.
Unlike traditional companies that rely on cash flow or core business, Twenty One's core value comes almost entirely from its Bitcoin position, introducing metrics like "Bitcoin per Share" (BPS) and "Bitcoin Return Rate" (BRR), attempting to directly tie equity value to Bitcoin reserves.
Cold Open: Why Didn't Investors Buy It?
Twenty One's stock price pressure on its first day of trading was not accidental but the result of multiple factors working together.
First, the overall sentiment in the crypto sector is low, affecting valuations. As Bitcoin's price has fallen over 25% from its October high, the valuation of crypto asset stocks has come under pressure, and the premium for the so-called "digital asset treasury (DAT)" model has significantly contracted. Investors have shifted from chasing the previous sharp price increases to seeking clearer profit models.
Second, Twenty One's own business model is not clear enough. Although the company holds 43,500 Bitcoin, CEO Jack Mallers repeatedly emphasized in public that "the company is not a simple financial company," with future plans to develop Bitcoin-related brokerage and lending businesses, but the specific implementation timeline, revenue sources, and profit paths have not been clearly disclosed.
Third, the valuation structure has raised market doubts. Twenty One's Bitcoin holdings mainly come from injections by related parties and PIPE financing, rather than traditional market accumulation, which to some extent reduces transparency and capital efficiency, leading to a significant asset discount by the market.
Despite this, Twenty One has good channel relationships in the cryptocurrency industry and the broader financial field. First, the company was established through a merger with Cantor Equity, the latter being a special purpose acquisition company (SPAC) supported by investment bank and brokerage firm Cantor Fitzgerald, whose chairman Brandon Lutnick is the son of U.S. Secretary of Commerce Howard Lutnick. Secondly, Tether, the company behind the stablecoin USDT, holds over 50% of the company's equity, and SoftBank Group, one of the world's largest investment holding companies, also holds a significant minority stake.
The company's CEO, Jack Mallers, is only 31 years old but has been involved with Bitcoin since he was 16. Before becoming CEO, he founded Zap, the parent company of Strike, which allows users to send and receive payments via the Bitcoin Lightning Network.
Crypto Vault Companies Collectively Hit
In fact, it's not just Twenty One; other once high-flying Bitcoin vault companies are facing similar pressures recently due to the sharp decline in cryptocurrency prices.
Affected by macroeconomic factors and market concerns about the slowing pace of interest rate cuts by the U.S. Federal Reserve, Bitcoin's price has fallen about 27% since hitting a new all-time high of $126,000 in October. Now, those companies that raised funds to buy Bitcoin at prices exceeding $100,000—once thought the price would never drop below six figures—are facing huge unrealized losses, while their equity premiums are evaporating simultaneously.
Data from Galaxy Research shows that Metaplanet, a Bitcoin vault company transformed from a Japanese hotel operator, has seen its unrealized profit of over $600 million in early October turn into an unrealized loss of about $530 million as of December 1st. Other companies holding large amounts of Bitcoin, such as Trump Media and Technology Group, GD Culture Group, and Empery Digital, are also facing tens of millions of dollars in unrealized losses, and their stock prices have plummeted.
Summary:
The sharp drop in Twenty One Capital's stock on its first day, and the similar pressures faced by other Bitcoin vault companies, reflect the high volatility and valuation risks of the crypto asset investment market. Despite having massive Bitcoin reserves and strong investment backing, the market remains cautious about the uncertainty of future profit models and innovative metrics directly pegged to Bitcoin prices.
For the industry, this is also a warning: innovation and capital support are important, but long-term stable development still requires clear, sustainable profit paths and transparent operational mechanisms. Otherwise, even high-profile "star companies" may face a severe reality check on their first trading day.
Related recommendation: Survey finds 60% of Asian millionaires plan to increase cryptocurrency purchases
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