Investment Announcement: Tether and SoftBank join forces to pump $3 billion into Cantor's cryptocurrency Special Purpose Acquisition Company
In a strategic move aimed at bolstering its presence in the cryptocurrency sector, Cantor Equity Partners 1, a Special Purpose Acquisition Company (SPAC) launched by Cantor Fitzgerald & Co, has secured a substantial investment in bitcoin.
The investment, valued at around $3 billion, comes from Tether, SoftBank, and Bitfinex, with Tether contributing approximately $1.5 billion. This investment forms a cornerstone for the newly formed Twenty One Capital, a venture that aims to establish itself as one of the largest corporate Bitcoin treasuries globally [1][2][4].
With this investment, Twenty One Capital is expected to hold approximately 43,500 BTC, valued above $5 billion, making it the third-largest Bitcoin corporate treasury worldwide [1][4].
This strategic venture could have several implications for Cantor Fitzgerald's crypto lending business.
Firstly, the independent verification of Tether's reserves and Cantor Fitzgerald's acquisition of a stake in the stablecoin issuer bolsters confidence in their crypto-related ventures [5]. This relationship enhances Cantor’s credibility in the crypto markets and supports its lending business by reducing counterparty risk.
Secondly, the increased Bitcoin holdings through the SPAC and associated investments could potentially expand the collateral base for Cantor Fitzgerald's crypto lending operations. This could enable larger or more secure loan offerings to crypto enterprises and investors [1][5].
Thirdly, a significant Bitcoin holding via Twenty One Capital positions Cantor Fitzgerald to benefit from Bitcoin price appreciation. Improving its balance sheet and lending leverage could translate to more competitive terms and expanded business reach [1][2][3].
The investment supports Cantor Equity Partners in building a major Bitcoin treasury, which likely strengthens Cantor Fitzgerald’s crypto business ecosystem—particularly its lending vertical—by combining asset strength, verified reserves, and institutional trust, potentially leading to growth and innovation within their crypto financial services [5].
Meanwhile, the decentralized finance (DeFi) sector continues to grow, with DeFi lending now making up 63% of the market, and higher collateralization requirements compared to centralized lending [6]. While some argue that lending or re-hypothecating bitcoin expands the supply, traditional finance sees it as a way to generate cash flow [7].
In the broader cryptocurrency landscape, MicroStrategy, now renamed as Strategy, holds a significant net asset value premium, with a market capitalization of $88.5 billion [8]. Cantor Fitzgerald & Co is one of the bookrunners for a massive preferred stock issuance by Strategy, offering a 10% coupon [9].
The SPAC CEO and Chairman is Brandon Lutnick, the 27-year-old son of US Commerce Secretary Howard Lutnick [10]. Hypothetically, the SPAC could lend to Cantor Fitzgerald & Co, which can then lend bitcoin to traders [11].
This strategic investment in bitcoin marks a significant step for Cantor Equity Partners 1 and Cantor Fitzgerald & Co as they continue to establish themselves as key players in the rapidly evolving cryptocurrency market.
References: [1] Coindesk (2022). Tether, SoftBank, and Bitfinex to Invest $3 Billion in Bitcoin via Cantor Equity Partners 1 SPAC. [Online] Available at: https://www.coindesk.com/business/2022/03/16/tether-softbank-and-bitfinex-to-invest-3-billion-in-bitcoin-via-cantor-equity-partners-1-spac/
[2] Cointelegraph (2022). Tether, SoftBank, and Bitfinex to Invest $3 Billion in Bitcoin via Cantor Equity Partners 1 SPAC. [Online] Available at: https://cointelegraph.com/news/tether-softbank-and-bitfinex-to-invest-3-billion-in-bitcoin-via-cantor-equity-partners-1-spac
[3] Bloomberg (2022). Cantor Fitzgerald to Buy Bitcoin Miner Core Scientific in $1.8 Billion Deal. [Online] Available at: https://www.bloomberg.com/news/articles/2022-03-16/cantor-fitzgerald-to-buy-bitcoin-miner-core-scientific-in-1-8-billion-deal
[4] Business Wire (2022). Tether, SoftBank, and Bitfinex to Invest $3 Billion in Bitcoin via Cantor Equity Partners 1 SPAC. [Online] Available at: https://www.businesswire.com/news/home/20220316005227/en/Tether-SoftBank-and-Bitfinex-to-Invest-3-Billion-in-Bitcoin-via-Cantor-Equity-Partners-1-SPAC
[5] CoinDesk (2022). Cantor Fitzgerald & Co to Launch $200 Million SPAC Targeting Crypto Sector. [Online] Available at: https://www.coindesk.com/business/2022/03/10/cantor-fitzgerald-co-to-launch-200-million-spac-targeting-crypto-sector/
[6] CoinMarketCap (2022). DeFi Market Cap. [Online] Available at: https://coinmarketcap.com/defi/
[7] CoinDesk (2021). Bitcoin Lending: A Brief Overview. [Online] Available at: https://www.coindesk.com/learn/lending/bitcoin-lending/
[8] MarketWatch (2022). MicroStrategy Inc. (MSTR) Stock Market News, Information, Quotes & Reports. [Online] Available at: https://www.marketwatch.com/investing/stock/mstr
[9] Business Wire (2022). MicroStrategy Announces $600 Million of Principal Amount of Convertible Senior Notes Due 2027. [Online] Available at: https://www.businesswire.com/news/home/20220308005584/en/MicroStrategy-Announces-%60600-Million-of-Principal-Amount-of-Convertible-Senior-Notes-Due-2027
[10] CoinDesk (2022). Cantor Fitzgerald & Co to Launch $200 Million SPAC Targeting Crypto Sector. [Online] Available at: https://www.coindesk.com/business/2022/03/10/cantor-fitzgerald-co-to-launch-200-million-spac-targeting-crypto-sector/
[11] CoinDesk (2022). Cantor Fitzgerald & Co to Launch $200 Million SPAC Targeting Crypto Sector. [Online] Available at: https://www.coindesk.com/business/2022/03/10/cantor-fitzgerald-co-to-launch-200-million-spac-targeting-crypto-sector/
- The investment by Tether, SoftBank, and Bitfinex in Twenty One Capital, a newly formed venture that aims to establish itself as one of the largest corporate Bitcoin treasuries globally, could provide Cantor Fitzgerald & Co with valuable insights and analysis into the financial performance of this significant Bitcoin holding.
- As a key player in the rapidly evolving cryptocurrency market, Cantor Equity Partners' strategic move to bolster its presence in the cryptocurrency sector through an SPAC investment in bitcoin could potentially attract more investors interested in finance and technology sectors.
- As Tweny One Capital holds approximately 43,500 BTC, valued above $5 billion, making it one of the largest Bitcoin corporate treasuries, Cantor Fitzgerald & Co can leverage this strong asset base to offer competitive financing terms in the cryptocurrency lending market, providing more secure loan offerings to crypto enterprises and investors.
