The announcement of the Twenty One Capital training last month met mixed reactions. While some have seen it as another massive step towards institutional adoption, others were tired that bitcoin could be the victim of “Wall Streetization”.
To better understand the reasons for optimism and apprehension surrounding the launch of twenty one capital, Beincrypto consulted Matt Mena, researcher at 21Shares, and Mati Greenspan, CEO of Quantum Economics.
The Bitcoin public giant emerges in the middle of mixed reactions
The unveiling of twenty-one capital notably surprised the Tradfi and Crypto space. This ambitious native Bitcoin company, supported by industry giants and high -level crypto lovers, has immediately become a focal point for intense discussion and speculation.
Jack Mallers, the famous Bitcoin and CEO of Strike. He would have directed twenty one as CEO.
In addition, the company has significant financial support from the USDT Tether and SoftBank Group, a global investment power.
Twenty a capital is structured as an entity listed on the stock market through a combination of companies with Cantor Equity Partners. The company should be launched with a substantial bitcoin treasure exceeding 42,000 BTC.
Its indicated mission includes the maximization of Bitcoin’s ownership by action, the defense of the adoption of Bitcoin, the production of related content and the exploration of the development of future native financial products of Bitcoin.
This news sparked a nuanced response, excitement about Bitcoin becoming more common alongside concerns about the way institutional participation could affect an asset designed to question traditional finance.
Bitcoin institutionalization: opening doors to a wider investment
For these faithful defenders of the potential of Bitcoin from the start, the formation of twenty-one capital has solidified their conviction according to which Bitcoin finally reached a new level of general public validation.
Major actors like Softbank and Tether are increasingly confidence in Bitcoin as a class of legitimate assets. Some also see the creation of a listed company only dedicated to Bitcoin, more solidifying its position on the market.
“The launch of 21 capital does not change the basic architecture or ethics of Bitcoin – but it emphasizes how institutional investors, such as Cantor Fitzgerald and Softbank, which manage hundreds of billions of dollars together, recognize more and more the financial value of Bitcoin as Matt Matto, Crypto Research at 21shares, told Matt Mena, Crypto Researcher in 21Shares, Matt Mena, Crypto Researcher at 21Shares, told Matt Mena, Crypto Researcher at 21Shares, Matt Mena, Crypto Researcher at 21Shares, told Matt Mena, Crypto Researcher in 21Shares, Aincrypo.
By institutionalizing Bitcoin, twenty-one capital would also open the assets to a wider class of investors.
Increase in liquidity and access
Crypto defenders systematically praised the steps bringing together the digital assets of traditional investors.
The approval last year of the negotiated Bitcoin and Ethereum negotiated funds (ETF) marked a significant initial decision in this direction. This development allowed traditional merchants to obtain portfolio exposure to these alternative assets without holding them directly.
The launch of Twenty One Capital will probably have a comparable impact. The establishment of a large Bitcoin treasure in a side on the stock market will increase liquidity and give traditional investors a more accessible route to Bitcoin exposure.
Meanwhile, unlike companies that simply allocate part of their Bitcoin assets, the whole goal of twenty one capital revolves around Bitcoin. This commitment could open the way to developments contributing to the growth and health of the Bitcoin ecosystem.
“Investment vehicles like 21 capital, Strategy (formerly Microstrategy) and the packaging and undoubtedly further from Bitcoin’s original vision by democratizing access to finance. They help make exposure to Bitcoin at the disposal of a wider basis of investors – from institutions to daily savers, which requires direct crypto or technical knowledge, “said Mena.
Despite the merit of these arguments, Tether and SoftBank, the significant support of the bank has several potential dangers.
Bitcoin’s decentralized features are inherent
Asked about twenty-one potential negative impact of the capital on the Bitcoin network, Mena made a critical distinction between two key aspects.
He said Twenty One Capital would be a service built above the Bitcoin network. As such, any centralization within their operations would not change the underlying decentralized nature of the Bitcoin protocol. Individuals would always be free to interact directly with Bitcoin directly, Peer-to-Peer.
“It is important, however, not to confuse institutional participation with control. Bitcoin remains decentralized – open, without permission and secured by a network of minors and nodes distributed worldwide. Entities like 21 capital do not change the protocol or do not centralize the assets – simply proposed access points that integrate Bitcoin into the existing financial infrastructure, “Mena told Beincryptopto.
But, despite this reality, a single entity with a corporate treasure of more than 42,000 BTC would inevitably inherit a significant influence on a market with a self-limiting offer from Bitcoin.
The feedback loop: financing other Bitcoin purchases
Since twenty one capital is only focused on Bitcoin, its stock market price will probably be closely linked to its value and its ability to increase its assets by action.
If the price of Bitcoin increases and the company is considered to be increasing its BPS effectively, its stock market price could assess. This higher evaluation on public procurement gives twenty capital several advantages.
A higher action price facilitates and more attractive for twenty one capital to increase additional capital through equity, loan funding or convertible tickets.
With newly acquired capital, the main strategy of Twenty One Capital, as indicated in their ad, is to strategically allocate capital to increase Bitcoin by action “. This intention results directly by the use of raised funds to buy more bitcoin.
While twenty-one capital accumulates bitcoin, it could exert upward pressure on its price, increasing the value of existing assets. This assessment could further improve the course of action and the call for company investors.
Consequently, this would make future increases in capital more effective, creating a positive feedback loop for the company.
This cycle could lead to a listed company controlling a substantial part of the limited Bitcoin offer. This perspective has led to discomfort in certain parts of the community.
Is Bitcoin’s distributed vision in contradiction with the accumulation of businesses?
The central principle of the vision of the Bitcoin of Satoshi Nakamoto was a wide distribution of property to avoid centralized control. This concept is in contradiction with a company like twenty one capital amassing a substantial part of the offer.
This considerable property could introduce market instability which harms small participants and deviates from the objective of a distributed digital currency. This degree of institutionalization has therefore raised fears of fears to transform bitcoin into another active of Wall Street.
This development could decrease the ideal of individual financial autonomy.
Mati Greenspan, CEO of Quantum Economics, reiterated the basic principles of Bitcoin in the light of this threat. He underlined the original creation of Bitcoin as a fundamental means of eliminating the intermediaries of financial processes.
“It is honestly confusing for me to see how guys like Jack Mallers and Michael Saylor can so brilliantly explain why Bitcoin is the highest asset ever created, then use this same explanation to try to sell you a stock. Personally? No thanks. I will stand in the real asset that they have so eloquently cut,” said Greenspan to Beincrypto.
For the moment, the outcome of this situation remains quite nuanced and unpredictable.
Navigate the fracture
In the end, Twenty One Capital’s Impact will probably be a complex balancing act. Its efforts could bring more legitimacy and investment more to Bitcoin, potentially accelerating its adoption as a global digital intake.
However, its important institutional support also includes the risk of prioritizing shareholders on the original decentralized vision of Bitcoin.
The key will be to observe the functioning of twenty-one capital, the types of products it develops and how its activities potentially support or compromise the fundamental principles of decentralization and nature between peers.
The roles of the community and Bitcoin regulators will be crucial to shape this trajectory.
Non-liability clause
Following the directives of the Trust project, this operating article presents opinions and prospects of experts or individuals in the industry. Beincrypto is dedicated to transparent relationships, but the opinions expressed in this article do not necessarily reflect those of Beincrypto or its staff. Readers must check the information independently and consult a professional before making decisions according to this content. Please note that our terms and conditions, our privacy policy and our non-responsibility clauses have been updated.
