Twenty One Capital CEO warns Bitcoin treasury model is failing

Raphael Zagury, the new CEO of Twenty One Capital, states that the premium-funded model for Bitcoin treasury firms cannot yield easy returns indefinitely. He advocates for developing cash-generating businesses around the company's BTC balance sheet. In a July 22 discussion with the SEC, Zagury explained the strategy of issuing shares above the net asset value of Bitcoin holdings to acquire more BTC, noting that as more firms adopt this approach, market-value premiums will likely converge toward 1x. Zagury emphasized that while the premium could return, it should not be the sole source of shareholder returns. Twenty One had previously outlined an operating-company model in May, focusing on acquiring or building operating businesses, enhancing capital-markets capabilities, and developing Bitcoin-backed financial products. The leadership change comes after Jack Mallers resigned as CEO on July 20, with the company stating his departure was unrelated to any disagreements. Zagury used mining as an example of potential cash generation, likening it to the role of insurance in Berkshire Hathaway's capital allocation. He acknowledged that Twenty One has not yet established such a model, and execution may be challenging. The company reported 43,514 BTC as of March 31, with a $10.57 million loss from operations, indicating that the anticipated cash-flow engine has not yet materialized. Zagury's discussion did not announce any asset sales, and the potential acquisition of Elektron Energy remains preliminary.

This content is provided for general informational purposes only and doesn't constitute financial, investment, legal, or tax advice. Any events, rewards, online promotions, or related information mentioned herein should not be considered a recommendation, solicitation, or invitation to purchase, sell, trade, or otherwise deal in any crypto assets. Crypto assets are highly volatile and may result in loss. The availability of WEEX services, products, and related events may vary by region. You are responsible for ensuring that your participation is in accordance with applicable local laws and regulations.