Key Takeaways: Twenty One Capital replaced CEO Jack Mallers with Raphael Zagury after Tether abandoned a three-way merger of Twenty One, Strike, and Elektron Energy. The company holds 43,514 Bitcoin but will no longer prioritize buying more, shifting instead to cash-flow-generating businesses. Its stock has fallen 43 percent this year to $5.32, giving it a $1.85 billion market cap.
Twenty One Capital is pivoting from a pure Bitcoin treasury play to a cash-flow-focused operating company after Tether abandoned plans to merge three crypto businesses into a single platform.
Jack Mallers stepped down as chief executive officer of Twenty One Capital (XXI) on Monday, seven months after the company went public on the New York Stock Exchange. Raphael Zagury, who previously led Elektron Energy, a Bitcoin mining firm backed by Tether, takes over immediately.
The leadership change follows the collapse of a proposed three-way merger that Tether pitched on April 29. The plan would have folded Twenty One Capital, Mallers' payments company Strike, and Elektron Energy into a single Bitcoin-native platform spanning treasury, payments, and mining. Galaxy Research had said the combined entity could rival Strategy's dominance among corporate Bitcoin holders. That vision lasted less than 12 weeks.
"Jack played a foundational role in building XXI. He took conviction in Bitcoin and turned it into a public company, and we're grateful for that," Paolo Ardoino, CEO of Tether and a Twenty One board member, said in a statement. "Now that we embark on the next chapter, Rapha is one of the best operators in this industry, with a track record of building businesses with strong cash flows and disciplined execution."
Strike will remain a standalone company, according to a statement from Twenty One. Discussions between Twenty One and Elektron are ongoing, though any deal would face extra scrutiny as a related-party transaction given Tether's majority stakes in both entities. Tether took full control of Twenty One in May by acquiring SoftBank's 25 percent stake.
Zagury, who held senior roles at Goldman Sachs, Deutsche Bank, and Merrill Lynch before co-founding Brazilian fintech lender OpenCo, outlined five strategic priorities for Twenty One. Buying more Bitcoin is not among them. The company plans to build and acquire operating businesses that generate cash flow, expand capital markets capabilities, develop Bitcoin-backed lending products, and apply a disciplined acquisition framework using Bitcoin as the investment benchmark.
"My job is to build the operating company around it, with the discipline, governance, and executional rigor of an institution," Zagury said. "I believe our business will perform best when we also focus on the cash flow we generate and the rigor with which we allocate capital, not only by the Bitcoin we hold."
Twenty One still holds 43,514 Bitcoin, making it the second-largest corporate holder after Strategy, according to BitcoinTreasuries.net. The company's stock closed Monday at $5.32, down about 43 percent this year, giving it a market capitalization of roughly $1.85 billion.
The strategic shift comes as digital asset treasury companies face mounting pressure. Bloomberg reported that Bitcoin's price slump has brought losses and job cuts across the sector. Twenty One's new model, which the company compared to Berkshire Hathaway, signals a broader question for the industry: if the second-largest Bitcoin treasury needs more than just Bitcoin to sustain itself, others may follow.
The Elektron Energy talks, still at a preliminary stage, will offer the first clue about whether Zagury can execute on his vision of pairing Bitcoin holdings with cash-flow-generating businesses.
This article is for informational purposes only and does not constitute investment advice.
