Twenty One Capital reported a $413.5 million net loss in the second quarter, with $401.5 million of that stemming from declines in the value of its digital asset holdings, according to results published August 11.
The loss underscores the exposure of bitcoin treasury companies to price volatility. Twenty One holds 43,514 BTC, valued at $2.78 billion at current prices, making it the second-largest publicly traded bitcoin treasury after Metaplanet, which holds 43,000 BTC.
Newly appointed CEO Raphael Zagury, who replaced founder Jack Mallers roughly three weeks prior, signaled a strategic pivot in a shareholder letter accompanying the earnings release. Zagury stated: “Twenty One owns one of the largest Bitcoin balance sheets in the public markets. That is a real advantage, but if Twenty One is going to be worth owning, it must become more than a Bitcoin treasury.”
Twenty One’s stock trades at a material discount to its underlying bitcoin holdings, reflected in a 0.7x mNAV ratio. Zagury characterized this gap as a capital misallocation. “That gap could be viewed as a misallocation of capital; we share that view,” he said.
Strategic Expansion Plan
Zagury outlined five priorities for Twenty One’s future. The company will strengthen governance, build or acquire operating businesses, develop capital-market capabilities, establish M&A operations, and launch a bitcoin lending and credit business.
Zagury cited Berkshire Hathaway as a structural blueprint for Twenty One’s evolution. The shift away from pure treasury operations comes as Strike, the bitcoin payments company founded by Mallers, dropped out of a proposed merger with Twenty One following Mallers’ departure.
Twenty One ended Q2 with $106.1 million in cash and $484.5 million in convertible notes outstanding. The company’s stock rose 1% during the first hour of trading on Tuesday, reaching $4.62 per share, though the stock remains down 50% year-to-date.
