- New venture backed by Tether, SoftBank, and Cantor Fitzgerald hits the market.
- Mallers has long preached Bitcoin maximalism.
- Sceptics are underwhelmed by Twenty One's model.
Twenty One Ventures, a new company set up with the sole purpose of hoovering up Bitcoin, is making a bold bet on the top crypto’s future.
Twenty One aims to launch with a treasury of 42,000 Bitcoin, a which are worth about $3.9 billion.
The firm’s backers have also picked Jack Mallers, a plucky Bitcoin believer with a long history in the crypto industry, to lead the venture.
Mallers fits the role of a Bitcoin evangelist to a T.
“Thinking you’re late to Bitcoin is a failure of ego,” Mallers said in one of his many sermon-like addresses posted on social media.
“Nobody has enough Bitcoin,” he preached in another.
Challenging Elon Musk
But the 31-year-old, who has been tinkering with Bitcoin since at least 2016, is a divisive figure. And he’s not afraid of sharing his opinions.
“I don’t give a fuck that you’re rich or popular,” Mallers said in a 2021 spat with Elon Musk over Tesla’s Bitcoin holdings.
“You clearly know nothing about Bitcoin or you’re more egotistic than we all thought.”
He’s also known as a “Bitcoin maxi” — slang for those who denounce other cryptocurrencies like Ethereum or Solana as at best distractions, and at worst, outright scams.
When President Donald Trump said in March that a US crypto reserve could include assets beyond Bitcoin, including Ethereum, XRP, and Solana, Mallers was quick to dismiss the notion.
“None of these altcoins deserve to be in the same sentence as Bitcoin,” he said.
‘You can’t actually redeem your shares for the BTC he’s claiming you own.’
— Pledditor
Mallers’ Bitcoin evangelism rivals that of Strategy’s Michael Saylor, who pioneered the idea of stockpiling Bitcoin and savouring the gains.
Formerly known as MicroStrategy, the company has amassed some 534,000 Bitcoin, which are worth over $49 billion.
Twenty One Ventures, which is backed by Tether, SoftBank Group, and Cantor Fitzgerald, has vowed to improve on Saylor’s approach by leveraging its stockpile and by issuing debt.
Mallers also dismissed BlackRock’s Bitcoin ETF, which trades as IBIT and has $48 billion in net assets, as “static exposure.”
“IBIT isn’t outgrowing your exposure to Bitcoin,” Mallers said in a Wednesday Bloomberg News interview.
Yet tapping leverage to multiply potential gains can be hazardous, especially in an asset as volatile at Bitcoin.
In its filing with the US Securities and Exchange Commission, Twenty One said a “significant decrease” in the value of its Bitcoin holdings could hinder its ability to satisfy its obligations on debt financing.
Some Bitcoin supporters dislike the idea of housing Bitcoin in holding companies the way Twenty One is doing.
“He promises you your BTC-denominated returns will only grow, never shrink, but yet you can’t actually redeem your shares for the BTC he’s claiming you own,” wrote the user Pledditor on X.
Breakthrough
In any event, there’s no denying Mallers’ Bitcoin boosting credentials.
His father, William Mallers Jr., a former chairman of the Chicago Board of Trade, discovered Bitcoin when it was under $100.
After dropping out of college, Mallers launched a chess teaching app at age 18 before pivoting to Bitcoin in 2016. His early ventures included a gambling app called Zero House Edge, but his breakthrough came with Strike, his Lightning Network payment platform.
In 2022, Mallers raised $80 million for Strike, which included investments from Bitcoin-focused venture investor Ten31, Washington University in St. Louis, and the University of Wyoming.
One year earlier, however, Mallers put himself on the map by helping introduce El Salvador and its president Nayib Bukele to Bitcoin. The Central American nation adopted Bitcoin as legal tender soon after.
Mallers is widely known for his irreverent interview style. He favours hoodies, and often speaks online from an empty closet.
Twenty One appears designed for sophisticated investors who are accustomed to dealing with polished finance professionals.
Saylor copycats
Tether has parlayed its USDT stablecoin, which has $145 billion circulation, into an influential role in crypto circles.
Howard Lutnick, the former head of Cantor Fitzgerald who has steered the company’s reserves into US Treasuries and touted its role as a source of power for the dollar, is now the US secretary of Commerce.
And SoftBank, led by financier Masayoshi Son, has made a killing on investments in Nvidia, Uber, and OpenAI.
Twenty One joins a growing number of Saylor copycats.
Tokyo-based Metaplanet spent $56 million on Bitcoin last week, while video game retailer GameStop’s stock recently surged after announcing a similar Bitcoin buying plan.
Bitcoin purists often frown on the idea of institutionalising Bitcoin, either through ETFs or holding companies like Twenty One and Strategy.
They say that’s anathema to the spirit of the cryptocurrency.
Mallers previously espoused Bitcoin’s ability to circumvent the traditional financial system and help the people of El Salvador in the same 2021 Bitcoin Miami speech that put him on the map.
So it’s no surprise that some feel his involvement with Twenty One is a betrayal of Bitcoin’s ethos.
“We are being co-opted. This is not winning,” Daniel Prince, who hosts The Once Bitten podcast, wrote on X of Twenty One.
Tim Craig is DL News’ Edinburgh-based DeFi Correspondent. Reach out with tips at tim@dlnews.com.
Pedro Solimano is a markets correspondent based in Buenos Aires. Got a tip? Email him at psolimano@dlnews.com.
Andrew Flanagan is a markets correspondent for DL News. Have a tip? Reach out to aflanagan@dlnews.com.
