Here’s the bear case for Twenty One Capital—why this new Bitcoin-native venture could underperform or unravel:
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1. Bitcoin Exposure = Volatility Amplifier
• Holding 42,000+ BTC at launch makes Twenty One a leveraged bet on BTC price.
• If Bitcoin corrects 30–50%, Twenty One’s equity could collapse, echoing what happened to MSTR in past drawdowns.
• Lack of diversified assets makes them vulnerable to macro risk (Fed tightening, ETF outflows, etc.).
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2. Tether Involvement = Trust Issue
• Tether (USDT) still faces transparency and regulatory scrutiny around reserve backing.
• If Tether faces a serious legal or liquidity event, Twenty One could suffer reputational and financial contagion, given their ownership stake.
• Critics may view the venture as an attempt to use Bitcoin optics to whitewash existing risk exposure.
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3. SoftBank’s History with Tech Bets
• SoftBank has a mixed track record (e.g., WeWork, Katerra, Oyo). Backing high-conviction, high-volatility companies without clear exit paths.
• Their involvement signals capital, not necessarily strategic soundness.
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4. Public Markets & Regulatory Pressure
• Taking this company public via SPAC invites intense SEC scrutiny.
• Bitcoin-denominated metrics like “BPS” and “BRR” are unorthodox—could be misunderstood or rejected by institutional investors.
• Regulatory crackdowns on crypto firms, stablecoins, or self-custody could force structural changes.
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5. Mallers as CEO = Binary Risk
•
@jack mallers is visionary, but not tested at the helm of a multi-billion dollar public company.
• Strike has had limited success scaling beyond Bitcoin maxis.
• Execution risk is high—can he pivot from startup rebel to corporate leader?
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6. The SPAC Curse
• SPACs have a terrible track record post-merger. Most drop 50–90% within 24 months.
• Investors might front-run redemptions, especially if BTC drops during de-SPAC window.
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7. Lack of Product or Revenue Strategy
• Owning Bitcoin is not a business model.
• If no real Bitcoin-native financial services (custody, yield, payments) are offered, it’s just another BTC ETF with overhead.
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Bottom Line (Bear View):
Twenty One might be a Bitcoin ETF wearing a hoodie.
Unless it builds real infrastructure, it’s exposed to BTC downside, SPAC dilution, and regulatory risk—with limited upside if it’s just a holding vehicle.