Is a New Bitcoin Crash Looming? Twenty One Capital Transfers 43,500 BTC During Major Losses

Ahead of its upcoming public launch in the United States on December 9, Twenty One Capital, a significant player in the Bitcoin (BTC) treasury landscape founded by Jack Mallers, has transferred a considerable amount of 43,500 BTC—valued at approximately $4.5 billion—into an escrow wallet. This action has raised concerns in the market about a potential sell-off, which could exert substantial selling pressure on Bitcoin as it strives to maintain a foothold above the crucial $90,000 support level.

Key Takeaways

Transfer of BTC: Twenty One Capital has moved 43,500 BTC to an escrow wallet ahead of its NYSE debut.
Financial Losses: The company is contending with a $1.5 billion loss on its Bitcoin investments.
Market Impact: The transfer has led to fears of a Bitcoin price drop, pushing it below $90,000 recently.
IPO Plans: Twenty One Capital is preparing for an IPO, focusing on Bitcoin ventures and shareholder engagement.
Banking Challenges: Jack Mallers faced account closure by JPMorgan Chase due to unspecified "concerning activity."

Bitcoin

A $1.5 Billion Loss in Bitcoin Investments

According to insights shared on the social media platform X (formerly Twitter) by experts like OxNobler, Twenty One Capital is handling a substantial loss of $1.5 billion on its Bitcoin investments. These financial difficulties raise concerns that the company’s actions could trigger a new downturn for Bitcoin, potentially affecting the overall cryptocurrency market as well.

This uncertainty has been mirrored in Bitcoin's recent performance, as the cryptocurrency has dropped below the $90,000 threshold, creating further worries about its future direction.

Bitcoin

The daily chart indicates BTC's attempts to stabilize above the important $90,000 level. Source: BTCUSDT on TradingView.com

Despite these challenges, Jack Mallers has explained the reasoning behind this significant Bitcoin transfer. He stated that this move is part of the preparations for Twenty One Capital’s forthcoming listing on the New York Stock Exchange (NYSE). The company is moving 43,500 BTC from third-party custody to a self-custody account, which enhances transparency by updating its proof of reserves.

Twenty One Capital, supported by notable entities like Tether and SoftBank, aims to compete with Michael Saylor's Bitcoin proxy firm, Strategy (previously MicroStrategy), in the burgeoning Bitcoin treasury space. A key milestone occurred on December 3, when shareholders of CEP greenlit a business merger with Twenty One Capital, paving the way for an initial public offering (IPO).

Once the transactions are complete, the newly merged entity will operate under the name Twenty One Capital, Inc., with stock trading expected to commence on the NYSE under the ticker symbol “XXI.”

Preparing for Its IPO

As the firm gears up for its highly anticipated public debut, Twenty One Capital has indicated that it will concentrate exclusively on Bitcoin-related undertakings, providing shareholders with fresh avenues to engage with BTC through equity markets. With a Bitcoin-centric operating model and a long-term vision aimed at value creation, the firm plans to position itself as a foremost platform for efficient Bitcoin accumulation and associated business initiatives.

This move towards going public comes after a challenging period for Mallers, who revealed that JPMorgan Chase had unexpectedly closed his accounts in September without providing a clear reason. “Last month, J.P. Morgan Chase threw me out of the bank… Whenever I asked them why, I received the same response: ‘We aren’t allowed to tell you,’” Mallers recounted on November 23. The closure letter referenced "concerning activity" and cited the Bank Secrecy Act, making it impossible for him to reopen accounts at that institution.

Featured image from DALL-E, chart from TradingView.com