America’s cryptocurrency market is booming since Trump threw off the previous regulations. Businesses are racing to capitalize on laxer rules in the hopes that more common people would get interested in cryptocurrency.
Twenty One Capital, a Bitcoin business that intends to go public through a $3.6 billion merger with a SPAC managed by Brandon Lutnick, son of Commerce Secretary and close Trump friend Howard Lutnick, was a major new participant that struck the market last week.
Tether and SoftBank Group support Twenty One. The company’s strategy is straightforward but dangerous: purchase Bitcoin worth billions of dollars and incur debt to purchase much more.
This concept was initially promoted by Strategy, the software business that became a Bitcoin whale.
The third cryptocurrency deal to reach $1 billion in the last two months is Twenty One’s $3.6 billion deal. Ripple agreed to pay $1.25 billion to acquire primary broker Hidden Road earlier this month.
Ripple is making a significant wager that institutional investors would desire a larger portion of the cryptocurrency industry.
One of the biggest links between cryptocurrency platforms and traditional finance was established in March when the cryptocurrency exchange Kraken took the initiative and secured a $1.5 billion acquisition of futures broker NinjaTrader.
Crypto firms placed large bets on the changing regulatory environment in the US
The cryptocurrency industry is expanding quickly, while traditional merger and acquisition activity remains slow. Galaxy Digital has finally received approval from the SEC and is getting ready for a direct listing on the Nasdaq in mid-May.
Even after going public on the Nasdaq, Galaxy will continue to be listed on the Toronto Stock Exchange, where it has been since 2021.
88 cryptocurrency trades worth $8.2 billion have concluded so far this year. By contrast, 2024 saw 188 transactions with a total value of just $2.9 billion. “There is hope that things changed at last,” said Eric Risley, founder of Architect Partners.
According to Risley, larger cryptocurrency businesses are once again focusing on expansion and are utilizing acquisitions to develop even more. The record for cryptocurrency deals, which was achieved in 2021 when trades reached $17 billion, may be broken in 2025, he continued.
After FTX blew up and regulators clamped down hard, cryptocurrency trades fell apart just two years ago. However, the atmosphere has changed since Trump took over. Crypto trades are expected to surge, according to bankers and advisors.
Trump has stacked regulatory bodies with proponents of cryptocurrency and pledged to establish the United States as the “undisputed Bitcoin superpower.” Additionally, Congress, which is controlled by Republicans, is promoting legislation to give digital assets a legitimate legal foundation.
SoftBank, owned by Masayoshi Son, is firmly supporting Twenty One. The business intends to launch with around $4 billion in Bitcoin from SoftBank, Bitfinex (Tether’s sister firm), and Tether.
Twenty One will be mostly owned by Tether and Bitfinex, and the business stated that it intends to fund an additional $585 million in order to acquire further Bitcoin.
Businesses who use this strategy dump massive quantities of Bitcoin onto their balance sheets and even take out loans to purchase more, betting that the price of the cryptocurrency will continue to rise. Strategy is now the largest corporate Bitcoin holder, having amassed more over $50 billion in Bitcoin.
This strategy isn’t universally seen as clever. Wall Street veterans are cautioning that simply purchasing and keeping Bitcoin is risky. Bitcoin collapses have destroyed fortunes in the past. Due to a sharp decline in the price of Bitcoin, Strategy itself reported a ruthless $5.91 billion loss for the quarter that concluded in March.
Earlier this week, Tesla also disclosed a $125 million loss on its Bitcoin holdings. Elon Musk’s electric vehicle firm has had a difficult journey since announcing to the public in 2021 that it was purchasing Bitcoin in the hopes that it would be profitable.
