Is Cantor Equity Partners the Next Big Thing in Bitcoin Investing?

As institutional interest in Bitcoin grows, a new SPAC-backed player is challenging MicroStrategy’s dominance as the gold standard for corporate Bitcoin treasuries. Cantor Equity Partners (CEP), the SPAC vehicle for Twenty One Capital, has emerged as a bold competitor, leveraging over 42,000 Bitcoin (worth $4 billion at launch) to rival MicroStrategy’s 553,555 BTC holdings. But with CEP’s stock soaring 58% on merger news and MicroStrategy’s shares fluctuating alongside Bitcoin’s price, investors are left asking: Is this SPAC worth the risk?

Ask Aime: Is Cantor Equity Partners a worthy competitor to MicroStrategy in the corporate Bitcoin treasuries market?

The SPAC Upstart: CEP’s Bitcoin Play

Cantor Equity Partners’ recent merger with Twenty One Capital, finalized in late 2024, positioned it as a Bitcoin-centric financial services firm. The deal, valued at $3.6 billion, has fueled CEP’s stock volatility, with shares surging 29% on May 1, 2025, to $50—a stark contrast to its April 21 low of $10.62. Analysts at td Cowen call it “the most-meaningful validation of MicroStrategy’s Bitcoin treasury model to date,” but warn that CEP’s small market cap ($132.48 million as of late 2024) and 2-employee operational footprint leave it vulnerable to execution risks.

CEP’s strategy hinges on aggressive Bitcoin accumulation, funded by $585 million in concurrent PIPE offerings. Its Bitcoin Return Rate (BRR)—a metric tracking Bitcoin ownership growth per share—aims to outpace MicroStrategy’s revised 25% annual target. Yet, its stock’s extreme volatility () suggests it’s more of a trader’s instrument than a long-term hold.

MicroStrategy: A Bitcoin Titan Under Pressure

MicroStrategy remains the undisputed leader, with Bitcoin holdings valued at $43.5 billion as of March 2025. But its Q1 results revealed cracks: a $4.217 billion net loss, driven by a $5.9 billion unrealized Bitcoin loss under new fair-value accounting rules. While its BTC Yield hit 13.7% year-to-date, MicroStrategy’s software division—a secondary revenue stream—struggled, with total revenue down 3.6% YoY.

The company’s reliance on equity issuance to fund Bitcoin buys has diluted shares aggressively. Its $21 billion ATM offering raised $9.9 billion by April, but the resulting share dilution threatens to erode Bitcoin-based metrics unless prices rise sharply.

Risk Factors: Volatility, Regulation, and Dilution

Both companies face existential risks tied to Bitcoin’s price swings. MicroStrategy’s $5.8 billion BTC $ Gain (as of April) depends on Bitcoin hitting $95,000—a level it briefly surpassed in late April but fell below by quarter-end. Meanwhile, CEP’s leverage ratio of 1.0 and reliance on convertible notes could amplify losses if Bitcoin declines.

Regulatory headwinds loom large. The SEC’s scrutiny of SPAC disclosures (Subpart 1600) and Bitcoin’s legal status remain unresolved. MicroStrategy’s $12.7 billion retained earnings uplift from fair-value accounting also exposes it to potential write-downs if Bitcoin’s price languishes.

The Verdict: High Risk, High Reward

CEP offers a speculative bet on Bitcoin’s future, amplified by its small size and aggressive growth targets. Its 58% merger-driven surge and 130% Q1 net income growth signal investor optimism, but its 53.7 million-share trading volume on April 24 highlights liquidity risks.

MicroStrategy, by contrast, is a scaled Bitcoin powerhouse with proven execution—despite Q1’s losses. Its software division, while declining in legacy products, shows cloud subscription growth (61.6% YoY), offering a potential hedge against Bitcoin volatility.

Final Analysis

Investors should proceed with caution. CEP’s upside is immense if Bitcoin rallies, but its lack of operational depth and market cap volatility make it a high-risk trade. MicroStrategy’s established position and diversified revenue streams—despite Bitcoin’s accounting swings—offer more stability.

For the bold: CEP’s 25%+ potential returns if Bitcoin hits $170,000 by 2027 (per TD Cowen) could justify a small speculative position. For the cautious: MicroStrategy’s 2.6% Bitcoin market share and $28.1 billion market cap (as of 2024) make it the safer institutional play.

In either case, investors must brace for volatility. As one analyst quipped, “This isn’t about picking the next Bitcoin winner—it’s about surviving the ride.”

Final Recommendation:
- CEP (SPAC): Aggressive investors seeking leveraged Bitcoin exposure may allocate 5–10% of a speculative portfolio.
- MSTR (MicroStrategy): Core holdings for institutional investors, with a 15–20% allocation in crypto-focused portfolios.

Both bets hinge on Bitcoin’s trajectory—a coin’s toss in today’s market.

Data Sources: SEC filings, Cantor Equity Partners Q1 2025 reports, microstrategy financial statements, and TD Cowen analyst notes.