Shares of Twenty One Capital, a firm focused on bitcoin, have risen by over 8% in after-hours trading on Wednesday, driven by a proposed merger with Strike and Elektron Energy put forth by majority shareholder Tether Investments. The independent investment arm of the stablecoin issuer intends to vote in favor of combining Twenty One Capital with Strike, a global bitcoin financial services company founded by Jack Mallers, and Elektron Energy, as stated in a press release. Mallers also serves as the CEO of Twenty One Capital. According to the press release, "upon completion, these transactions would position Twenty One Capital to become the world's premier listed Bitcoin company: a public entity combining Bitcoin treasury, mining, financial services, lending, capital markets, and strategic consolidation into one unified platform." The terms and timelines of the merger have not been disclosed.
Elektron Energy, led by Raphael Zagury, currently manages around 5% of the bitcoin network's computing power, with production costs below $60,000 per bitcoin. Tether has also proposed that Zagury take on the role of President of the combined entity, leveraging his experience in mining and capital markets alongside Mallers' expertise in product and consumer bitcoin services. Following its public listing in December through a SPAC merger with Cantor Equity Partners, Twenty One Capital entered the market as a bitcoin treasury firm with 43,514 BTC, backed by Tether, Bitfinex, and Strike CEO Jack Mallers.
The company initially focused on "capital-efficient bitcoin accumulation." The proposed merger is expected to expand Twenty One Capital's commitment beyond treasury exposure, transforming it into a platform with operating businesses, recurring revenue opportunities, and enhanced long-term Bitcoin accumulation capabilities, as stated in the press release. "The combined transactions would propel Twenty One Capital beyond sole treasury exposure, towards a platform featuring operating businesses, recurring revenue streams, and enhanced long-term Bitcoin accumulation capabilities," the statement added.