Digital dominance of Bitcoin: Transitioning from digital asset to currency unit
In a groundbreaking move, Twenty One Capital, a Bitcoin-native financial services company co-founded by Jack Mallers, CEO of Strike, is challenging conventional financial metrics by prioritizing Bitcoin accumulation and growth. This bold approach aims to redefine corporate finance, positioning Bitcoin as not just a speculative digital asset, but a foundational element in the global financial system.
Twenty One Capital's innovative strategy involves building financial services directly on Bitcoin's blockchain rails, eliminating intermediary layers typical of traditional finance. This native integration supports new possibilities for capital markets, using Bitcoin as the foundational unit of account.
The company's commitment to Bitcoin is evident in its substantial Bitcoin treasury. With nearly $3.9 billion worth of Bitcoin recently transferred to it, Twenty One Capital has become the third-largest corporate holder of Bitcoin worldwide, following MicroStrategy and MARA Holdings. This substantial Bitcoin treasury underscores Twenty One Capital's commitment and capacity to shape Bitcoin-based corporate finance.
Prominent investors such as Tether, Bitfinex, and SoftBank have backed Twenty One Capital, providing hundreds of millions in capital to expand its Bitcoin treasury and infrastructure. The company plans to go public via a SPAC merger with Cantor Equity Partners, marking a major milestone for a Bitcoin-focused financial services company valued at $3.6 billion. This move could further legitimise Bitcoin as a corporate accounting unit.
Twenty One Capital's focus extends beyond just holding Bitcoin; it is pioneering a model that could transform corporate finance away from fiat dependency towards Bitcoin-native operations. The company introduces Bitcoin Return Rate (BRR) and Bitcoin Per Share (BPS) as key performance indicators, measuring the rate at which BPS grows over time and representing the amount of Bitcoin each fully-diluted share holds, respectively.
Financial analyst Preston Pysh discusses the instability of the current monetary system and the erosion of fiat currencies' purchasing power as driving factors for the rise of Bitcoin as a reliable store of value. He argues that the increasing adoption of Bitcoin by corporate entities, including MicroStrategy, is accelerating its rise as the new standard in finance. Companies like MicroStrategy have already integrated significant Bitcoin holdings into their balance sheets, demonstrating the increasing acceptance of Bitcoin by traditional financial institutions.
Pysh contends that Bitcoin's ability to serve as an alternative to fiat money is a significant factor in its growing influence and acceptance. The rise of Bitcoin as a unit of account is a response to the instability of the current monetary system and the erosion of fiat currencies' purchasing power. Twenty One Capital aims to emphasize Bitcoin's role over traditional currency, operating with a focus on Bitcoin accumulation and growth, rather than traditional fiat metrics.
In conclusion, Twenty One Capital's innovative approach to corporate finance is reshaping the financial landscape. By making Bitcoin both the store of value and the unit of account within a fully integrated financial infrastructure native to Bitcoin, Twenty One Capital is paving the way for companies to manage treasury operations and capital markets directly within the Bitcoin ecosystem. Bitcoin is becoming more than just a speculative asset; it is becoming the unit of account that corporations and individuals alike are looking to for stability and growth in an increasingly uncertain financial landscape.
By embracing Bitcoin as the foundational unit of account within its operations, Twenty One Capital aims to redefine traditional investing and corporate finance paradigms. This pioneering approach, quantified by Bitcoin Return Rate (BRR) and Bitcoin Per Share (BPS), may lead to a future where corporations manage treasury operations and capital markets directly within the Bitcoin ecosystem, solidifying Bitcoin's role beyond a speculative asset.
