Twenty One's $4B Bitcoin Holdings Boosts MSTR Stock

Michael Saylor's bitcoin buying strategy has garnered both supporters and critics. However, the emergence of a new competitor, Twenty One, which already holds nearly $4 billion worth of BTC on its balance sheet, is seen as a bullish sign by at least one Wall Street analyst.

When SoftBank, Tether, and Cantor Fitzgerald announced plans to launch Twenty One, a new bitcoin investment company structured around holding bitcoin as its primary business, many viewed it as a significant rival to Saylor's Strategy. On its first day, Twenty One's bitcoin holdings would rank it as the third-largest publicly held bitcoin treasury.

In traditional finance, such a formidable competitor could potentially hinder a dominant company's market share and capital raise opportunities, especially since Twenty One is launching with over 42,000 BTC, valued at nearly $4 billion at the spot price.

However, analysts Lance Vitanza and Jonnathan Navarrete from td cowen see this development differently. They argue that the launch of Twenty One reflects the most meaningful validation of Strategy's bitcoin treasury operations to date, making them "incrementally bullish" on the stock.

The analysts suggest that the new rival could even convert MSTR's biggest skeptics, institutional investors, into believers in Saylor's bitcoin buying strategy. This move could increase demand for bitcoin from a high-profile entrant, potentially outweighing any pressure on Strategy’s cost of capital and attracting more capital into buying bitcoin.

TD Cowen maintained its $550 price target for mstr and projects that the company could hold 757,000 BTC by the end of fiscal year 2027, which is about 3.6% of bitcoin’s total supply. According to the analyst's forecast, if bitcoin hits an average price of $170,000 by then, TD Cowen estimates that this stash could be worth $129 billion.

The bullish impact of this rivalry is already evident in the market. The shares of Cantor Equity Partners, Twenty One's SPAC vehicle, have climbed as much as 130% since the announcement, while MSTR stocks have remained strong.