Nikolas Sargeant
Cantor Fitzgerald is preparing to enter the cryptocurrency market in a significant way with plans to launch a $3 billion Bitcoin investment vehicle in collaboration with major players Tether, SoftBank, and Bitfinex. This strategic move comes as institutional interest in digital assets grows under the crypto-friendly Trump administration.
The initiative emerges as Bitcoin continues trading near all-time highs, attracting investors looking to capitalize on the current cryptocurrency cycle's momentum.
According to Financial Times reporting, the newly formed entity, known as 21 Capital, will receive substantial Bitcoin contributions from its founding partners. Tether leads the investment with $1.5 billion in Bitcoin, followed by SoftBank with $900 million and Bitfinex contributing $600 million. The structure reportedly draws inspiration from MicroStrategy's successful transformation from a software company into a major Bitcoin holder with significant digital asset reserves.
New Leadership Drives Cantor's Expanding Cryptocurrency Strategy
Brandon Lutnick, who assumed the chairman role at Cantor Fitzgerald following his father Howard Lutnick's appointment as commerce secretary in the Trump administration, is spearheading this cryptocurrency initiative. Under his direction, the firm has strengthened its digital asset involvement, including advisory services for notable transactions such as Tether's $775 million investment in video platform Rumble.
The investment vehicle will operate through Cantor Equity Partners, a special purpose acquisition company that secured $200 million earlier this year. Additional financing includes a planned $350 million convertible bond issuance and a $200 million private equity placement to expand Bitcoin holdings. The strategy involves converting Bitcoin contributions into 21 Capital shares at $10 each, based on an internal Bitcoin valuation of $85,000.
While the partners aim to announce the deal within weeks, the arrangements remain subject to modification or potential cancellation.
Wall Street Drawn to Bitcoin Amid Policy Support and Market Growth
This development reflects the broader resurgence in institutional cryptocurrency investment. Bitcoin's price reached over $108,000 following Trump's November election victory, currently trading around $92,000. Despite market fluctuations, the overall positive trend has attracted firms seeking to replicate early adopters' success.
MicroStrategy, which began its Bitcoin-focused strategy in 2020, now holds a market capitalization exceeding $9 billion. Its approach of leveraging equity and debt to accumulate Bitcoin has become a blueprint for companies looking to establish themselves as crypto-focused entities in public markets.
The venture carries certain reputational considerations, as Tether and Bitfinex previously settled significant investigations with U.S. regulators in 2021. However, the Trump administration's promised regulatory easing for cryptocurrencies may create a more supportive environment for such initiatives going forward.
