In a turbulent debut, Twenty One (XXI) saw its stock plunge by 25% on its first day of trading, following the completion of a merger with Cantor Equity Partners (CEP). The shares are currently priced around $10.50, aligning closely with its PIPE pricing of $10, indicating a challenging start for the bitcoin-focused firm.
Despite the rocky launch, XXI enters the market with significant assets, claiming the third-largest corporate bitcoin treasury, holding 43,514 BTC. The company is also backed by notable players in the cryptocurrency space, including Tether, Bitfinex, and Jack Mallers, the CEO of both Strike and XXI. Its business strategy emphasizes capital-efficient bitcoin accumulation and services within the bitcoin ecosystem, grounded in onchain proof of reserves.
XXI’s poor performance is not an isolated incident; it reflects broader struggles facing bitcoin treasury companies this year. Most recently, Anthony Pompliano’s bitcoin treasury vehicle, ProCap BTC (BRR), completed its SPAC deal just last week. Unfortunately, BRR has since dropped over 60%, currently trading at about $3.75, highlighting the challenges inherent in the PIPE pricing methodology that affects these businesses.
Another significant casualty in the sector is KindlyMD (NAKA), the most well-known U.S. listed bitcoin treasury company to utilize a PIPE for its financing. It has plummeted to $0.43, marking a staggering 99% decline from its all-time high.
As for the broader market, bitcoin itself remains relatively stable, holding at around $90,900 over the past 24 hours, even as sentiment among bitcoin treasury firms seems to diminish. The recent fluctuations underline the volatility in this niche market and raise questions about the sustainability of models relying heavily on SPAC mergers and PIPE transactions.
