A $3 billion bitcoin special purpose acquisition company (SPAC) backed by US Commerce Secretary Howard Lutnick and Japanese investors is set to revolutionize institutional bitcoin investing, mirroring MicroStrategy’s successful proxy model.
Crypto power players are backing a $3 billion ‘bitcoin special purpose acquisition company (SPAC)’ as the Trump administration‘s policies spark renewed optimism in the industry. The venture, dubbed Cantor Equity Partners, is led by Brandon Lutnick, son of U.S. Commerce Secretary Howard Lutnick and chair of Cantor Fitzgerald.
A new model for institutional bitcoin investing is emerging with the SPAC, which raised $200 million in January, will help form a new firm, 21 Capital, seeded with $3 billion in bitcoin from the crypto heavyweights. This deal mirrors MicroStrategy‘s bitcoin proxy model, where the BTC is converted into equity at a valuation of $85,000 per coin. The venture plans to raise another $550 million through bonds and private equity to purchase more BTC.
Bitcoin investing involves acquiring and holding Bitcoins with the expectation of long-term growth in value.
It's a decentralized digital currency, not backed by any government or institution, making its value volatile.
Investors can buy, sell, and trade Bitcoins on online exchanges, such as 'Coinbase' and 'Binance'.
The value of Bitcoin is determined by supply and demand, influenced by factors like adoption rates, regulatory changes, and global economic conditions.
As with any investment, it's essential to educate yourself and consider risks before investing in Bitcoin.
Key players are backing Cantor Equity Partners, including Cantor Fitzgerald, one of Tether‘s custodians, holding the majority of its U.S. Treasuries, is contributing significantly to the SPAC. Howard Lutnick has softened his stance on Tether’s liquidity while testifying before the Senate after initially saying the stablecoin issuer could account for every dollar. Tether and Bitfinex are contributing $1.5 billion and $600 million, respectively, while SoftBank is adding $900 million.
Tether is a type of cryptocurrency that is pegged to the value of another asset, typically the US dollar.
It was created in 2014 by Brock Pierce and Craig Sellars, with the goal of providing a stable store of value for users.
Tether's price is supposed to mirror the value of its underlying asset, making it a popular choice for trading and hedging.
However, there have been controversies surrounding Tether's stability and transparency.
The deal comes amid renewed crypto optimism under the Trump administration, with bitcoin hovering near $92,000 and regulatory tailwinds shifting. The SPAC is expected to be announced in the coming weeks, but could still change, according to the ‘Financial Times.’ With institutional bets on the rise, this new venture may mark a significant turning point for the industry.
An institutional bet is a wager made by a professional organization, such as a hedge fund, investment bank, or pension fund.
These institutions invest in financial markets to generate returns and manage risk.
Institutional bets are typically large-scale and involve significant amounts of capital.
They can be placed on various assets, including stocks, bonds, commodities, and currencies.
Institutional investors often use sophisticated strategies and models to make informed investment decisions.
