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1. The Emergence of Twenty One Capital: A Strategic Bitcoin Conglomerate
In April 2025, the founding of Twenty One Capital was announced, a new company focused on the acquisition and management of Bitcoin. The company is starting with a portfolio of over 42,000 Bitcoin, equivalent to approximately US$3.6 billion, making it the third-largest institutional Bitcoin holder worldwide. The company was founded through a partnership between SoftBank, Tether Holdings SA, and Cantor Fitzgerald. SoftBank is investing approximately US$900 million and holds a minority stake in the company.
Twenty One Capital plans to finance further Bitcoin purchases through the issuance of convertible bonds and private equity placements. An initial target is to issue a convertible bond worth US$385 million and a private equity placement of US$200 million. The company is led by Jack Mallers, a well-known player in the Bitcoin payment infrastructure space.
2. Japan’s Economic Situation and the Yen Carry Trade
Japan has pursued a policy of extremely low interest rates for decades to stimulate economic growth. However, this low interest rate policy has led investors to transfer capital to higher-yielding markets, particularly the US. This phenomenon is known as the yen carry trade. Investors borrow yen at low interest rates and invest in assets with higher returns, leading to a massive outflow of capital from Japan.
One risk of this trade is that an appreciation of the yen makes it more expensive to repay the loans, thereby reducing investors’ profits or even causing losses. An example of this was seen in July 2024, when the yen appreciated by 12% against the US dollar within a short period of time, causing considerable turmoil on the financial markets.
Yen/dollar annual chart (Image: Tradingview)
3. SoftBank: Strategic Investor with Close Ties to the Government
SoftBank is a Japanese multinational conglomerate known for its extensive investments in technology companies. Although it is a private company, SoftBank often acts in line with Japan’s strategic interests. With access to cheap capital, SoftBank invests globally in technologies to strengthen Japan’s position in the global economy.
SoftBank’s stake in Twenty One Capital can be seen as part of this strategy, as it enables Japan to position itself in the digital asset space while benefiting from global developments in the cryptocurrency market.
4. The Tole of the US and the Swift System
The US benefits from the role of the US dollar as the global reserve currency. Through the Swift payment system, it controls global payment flows and can effectively implement economic sanctions. This control enables the US to assert its economic and political interests worldwide.
However, this dominance also raises concerns among other countries that want to reduce their dependence on the US dollar. The establishment of companies such as Twenty One Capital can be seen as a step toward a more diversified global financial infrastructure that is less controlled by the US.
5. Tether as an Instrument of New Financial Structures
The Tether Holdings SA is the issuer of the stablecoin USDT, which is pegged to the US dollar. Tether holds significant amounts of US government bonds to ensure the stability of its tokens. In 2024, US government bonds in Tether’s portfolio amounted to approximately US$94 billion, making Tether the seventh largest holder of US government bonds worldwide.
By providing USDT, Tether enables the trading of digital assets outside the traditional banking system, which is particularly attractive for countries seeking to reduce their dependence on the US dollar.
6. Japan’s Strategic Dilemma
Japan finds itself in an economic dilemma:
- Raising interest rates could strengthen the yen and destabilize the yen carry trade, which could lead to turmoil in the financial markets.
- Further interest rate cuts are hardly possible, as rates are already close to zero.
In addition, Japan holds significant amounts of US government bonds – around $1.125 trillion in February 2025. Selling these bonds could strain relations with the US and have economic consequences.
In this context, investing in Bitcoin via Twenty One Capital offers Japan an opportunity to strengthen its economic sovereignty while benefiting from the advantages of digital assets.
7. Bitcoin as a Way Out and Strategic Reserve
Bitcoin is increasingly seen as the digital equivalent of gold – a limited, decentralized, and globally accepted store of value. For Japan, investing in Bitcoin offers the opportunity to hold assets outside the sphere of influence of traditional financial systems.
Through its partnership with Tether and SoftBank, Japan can invest in Bitcoin via Twenty One Capital without being directly dependent on the US dollar. This allows for diversification of national reserves and strengthens economic independence.
8. Impact on the Global Bitcoin Market
The initial investment of 42,000 Bitcoin by Twenty One Capital represents a significant market movement.
By way of comparison, this amount is equivalent to about a quarter of the Bitcoin reserves currently held by the US. Such an entry by a major player is likely to influence the price in the short term, but also reduce liquidity in the long term and further exacerbate the scarcity of Bitcoin.
In addition, this investment signals to other institutional investors the growing interest in Bitcoin as a strategic asset, which could lead to further investments and increased demand.
9. Bitcoin as a “Black Hole” for Capital
An observable phenomenon in the Bitcoin market is the tendency of large players to hold acquired Bitcoin for the long term without putting it back on the market. Such entities act like “black holes” in the financial system – they attract Bitcoin but do not release it again.
Examples of this include companies such as MicroStrategy and now Twenty One Capital. This development reduces the available supply of Bitcoin and could have a significant impact on the price and market structure in the long term.
10. The Biggest Catalyst for Bitcoin: Time
Bitcoin does not need a specific catalyst to increase in value. Rather, time itself is the decisive factor. As time goes on, more and more players recognize the characteristics and advantages of Bitcoin, leading to steadily growing acceptance.
This continuous development, coupled with the limited availability of Bitcoin, creates an environment in which the value of Bitcoin can increase in the long term without the need for a specific event.
Author
Ed Prinz serves as Chairman of the most renowned non-profit organization in Austria specializing in blockchain technology. DLT Austria is actively involved in educating and promoting the value and application possibilities of distributed ledger technology. This is done through educational events, meetups, workshops, and open discussion forums, all in voluntary collaboration with leading industry players.
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Disclaimer
This is my personal opinion and not financial advice.
For this reason, I cannot guarantee the accuracy of the information in this article. If you are unsure, you should consult a qualified advisor whom you trust. This article does not make any guarantees or promises regarding profits. All statements in this and other articles are my personal opinion.
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