Lutnick's Cantor plans $3 billion bitcoin venture with SoftBank and Tether: FT
Quick Take
- Cantor, currently led by the son of U.S. Commerce Secretary Howard Lutnick, is planning to set up a $3 billion bitcoin investment vehicle with SoftBank, Tether and Bitfinex, according to the Financial Times.
- The initiative involves setting up a new entity named 21 Capital, which would aim to create a “publicly listed alternative” to the Michael Saylor-led Strategy.
Brokerage firm Cantor Fitzgerald is planning a $3 billion bitcoin investment project with SoftBank, Tether and Bitfinex, the Financial Times reported, citing people familiar with the matter.
Cantor is currently led by chair and CEO Brandon Lutnick, son of former CEO Howard Lutnick who resigned earlier this year to assume the role of U.S. Secretary of Commerce under the Trump administration.
The reported bitcoin initiative involves Lutnick's special purpose acquisition company, Cantor Equity Partners, using the $200 million it raised in January to establish a new entity called 21 Capital.
According to the FT report, Tether is set to contribute $1.5 billion worth of bitcoin to 21 Capital. Japanese investment giant SoftBank would contribute $900 million in bitcoin, while Bitfinex, the crypto exchange owned by the same company that owns Tether, reportedly plans to supply $600 million worth of the cryptocurrency.
With crypto contributions worth billions of dollars, 21 Capital aims to emulate the success of Michael Saylor-led Strategy's bitcoin investment approach by creating a "publicly listed alternative," the FT report said.
Strategy issued stocks and speculative debt to purchase bitcoin, with its current holdings standing at 538,200 BTC. Its stock price has risen 159% in the past year, according to Google Finance data.
The reported investments would eventually see the three companies' bitcoin holdings converted into shares of 21 Capital at $10 per share, implying a valuation of $85,000 per bitcoin.
Separately, Cantor's vehicle will raise a $350 million convertible bond and a $200 million private equity placement for additional bitcoin purchases, the report said.
The FT report said the deal is scheduled to be officially announced in the coming weeks, while noting that it could still be revised or abandoned.
The Block has reached out to Cantor, Tether, SoftBank and Bitfinex for comment.
The report of Cantor's potential bitcoin foray comes as the U.S. administration under President Donald Trump has brought favorable changes for the crypto industry, promising friendlier crypto policies while rescinding enforcement actions against various companies.
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