Key Takeaways
- Tether has unveiled plans to combine Twenty One Capital (XXI), Strike, and Elektron Energy
- XXI shares climbed more than 6% during after-hours trading on the news
- The merger would create a comprehensive platform spanning Bitcoin treasury, mining, and payments
- Jack Mallers set for executive position; Raphael Zagury of Elektron nominated for president role
- Financial details and completion timeline remain undisclosed
Shares of Twenty One Capital (XXI) rallied over 6% in extended trading Wednesday following an announcement from majority investor Tether Investments regarding a proposed three-company merger involving Bitcoin payment platform Strike and cryptocurrency mining operation Elektron Energy.
The equity closed regular market hours down 1.7% at $7.83 but surged to reach $9.28 during after-hours activity before moderating to $8.35.
According to Tether, it plans to use its XXI ownership stake to support both proposed transactions. The initial deal would see XXI merge with Strike, while the subsequent transaction would incorporate Elektron Energy, forming a singular publicly-traded Bitcoin-centric enterprise.
XXI shares have faced headwinds throughout the current year. The stock has declined over 10.5% since January, mirroring the broader downturn in Bitcoin valuations.
The firm maintains a treasury of 43,514 BTC, positioning it as the second-largest corporate Bitcoin holder globally. Only Strategy, Inc. surpasses it with holdings of 818,334 BTC.
Strategic Contributions from Each Entity
Strike would bring its profitable financial services infrastructure to the table, along with extensive global reach and established regulatory frameworks, according to Tether’s announcement.
Elektron Energy would contribute substantial Bitcoin mining capacity. The company controls approximately 5% of the entire Bitcoin network’s computational power, with reported all-inclusive mining costs under $60,000 per Bitcoin.
The consolidated entity would encompass Bitcoin treasury management, mining operations, financial services, lending facilities, and capital markets functions within a single public company structure.
“These combined transactions would transform XXI from a pure treasury play into a diversified platform featuring operational businesses, sustainable revenue streams, and enhanced Bitcoin accumulation strategies,” Tether stated in its official announcement.
Proposed Executive Team
Tether has nominated Raphael Zagury, founder and chief executive of Elektron, for the president position at the merged organization.
Jack Mallers, who serves as both Strike’s founder and CEO and XXI’s co-founder and CEO, would assume an executive position within the new company structure.
Tether characterized this leadership combination as uniting “Mallers’ innovative product vision, brand recognition, and consumer-facing Bitcoin expertise with Zagury’s capital markets acumen, operational proficiency, and implementation capabilities.”
Additional leadership appointments were not revealed.
XXI completed its public listing in December via a SPAC transaction with Cantor Equity Partners. The company launched with backing from Tether, Bitfinex, and Mallers, focused on accumulating Bitcoin through capital-efficient strategies.
Should these mergers proceed as outlined, the company’s original mission would evolve significantly beyond passive Bitcoin holdings.
Tether has not released deal valuations or anticipated closing dates for either proposed transaction.
