Cantor Fitzgerald Spearheads $3 Billion Bitcoin Venture with SoftBank and Tether

Cantor Fitzgerald, under the leadership of Brandon Lutnick, collaborating with SoftBank, Tether, and Bitfinex, is set to launch a $3 billion Bitcoin acquisition vehicle.

This strategic move aims to capitalize on the favorable cryptocurrency policies under the administration of U.S. President Donald Trump. The initiative, driven by Brandon Lutnick, who recently assumed the role of chair at Cantor Fitzgerald following his father Howard Lutnick’s appointment as Trump’s commerce secretary, seeks to position the brokerage at the forefront of a developing crypto investment surge. The venture draws inspiration from Strategy (formerly MicroStrategy), a software company that achieved remarkable success by pivoting to Bitcoin investments, amassing a $91 billion market value through its substantial Bitcoin holdings.

The special purpose acquisition company, named Cantor Equity Partners, raised $200 million in January to establish a new entity called 21 Capital. This entity will receive $3 billion in Bitcoin contributions from its partners, with Tether providing $1.5 billion, SoftBank contributing $900 million, and Bitfinex adding $600 million.

Additionally, according to the Financial Times, the vehicle plans to raise a $350 million convertible bond and a $200 million private equity placement to acquire more Bitcoin. The investment structure will eventually convert the partners’ Bitcoin contributions into shares of 21 Capital, priced at $10 per share and valuing Bitcoin at $85,000 per coin. This ambitious setup aims to create a publicly listed alternative in the crypto market, aligning with some of the industry’s most prominent players.

A Strategic Move Amid a Crypto-Friendly Climate

The timing of this venture aligns with a shifting regulatory environment in the United States, where the Trump administration has signaled a more accommodating stance toward cryptocurrency trading.

Cantor Fitzgerald has already benefited from this climate, notably advising on Tether’s $775 million investment in Rumble, a rightwing video-sharing platform. Bitcoin’s price, which soared to $109,000 following Trump’s election victory in November, currently hovers near record highs at $93,000 per coin. Despite recent fluctuations, the crypto market remains robust, presenting an opportune moment for Cantor’s initiative. However, the deal, expected to be announced in the coming weeks, is not without risks, as the figures and structure could change, and the agreement may not materialize.

Cantor Fitzgerald’s foray into cryptocurrency extends beyond this venture. The brokerage has established two additional special purpose acquisition companies under Brandon Lutnick’s leadership, both actively seeking investment opportunities.

Furthermore, Cantor has recently underwritten several third-party SPACs, indicating a broader strategy to engage with the evolving financial landscape. The collaboration with SoftBank, Tether, and Bitfinex, despite the latter two settling significant regulatory investigations in 2021, underscores the high-stakes nature of this endeavor. As the cryptocurrency market continues to mature, Cantor Fitzgerald’s bold move could set a precedent for traditional financial institutions seeking to integrate digital assets into their portfolios, potentially reshaping the intersection of finance and technology.