Galaxy believes Jack Mallers' XXI could compete with MicroStrategy following Tether proposed merger.

Alex Thorn, head of research at Galaxy, said that if the merger between Twenty One Capital (XXI), Strike, and Elektron Energy goes through successfully, XXI would become the second most influential publicly traded company in the Bitcoin sector, after MicroStrategy.

Tether Investments, XXI's largest shareholder, said this week that it would support the merger of the company with Strike – a provider of Bitcoin-related financial services – which would then go on to merge with Bitcoin mining operator Elektron Energy.

Galaxy positions XXI as MicroStrategy's biggest competitor.

XXI currently holds 43,514 Bitcoin (BTC), making it the world's second-largest publicly traded company holding Bitcoin, after MicroStrategy.

Strike offers brokerage, custody, and Bitcoin-based lending services in over 100 countries. Meanwhile, Elektron Energy contributes approximately 50 EH/s of mining power, equivalent to about 5% of the total Bitcoin network, with mining costs estimated at under $60,000 per coin.

In Galaxy Research's weekly newsletter published on May 1, 2024, Thorn suggested that the merged entity would possess strengths that MicroStrategy lacked.

“If XXI, Strike, and Elektron merge… it could be argued that they would become the most strategically important publicly traded Bitcoin-only company after MicroStrategy. Unlike MicroStrategy, they would possess a steady stream of operating cash flow in addition to their Bitcoin treasury,” Thorn explained .

Internal conflicts and litigation with Swan cast a shadow over the deal.

Galaxy has highlighted governance challenges. Jack Mallers currently serves as CEO of both XXI and Strike , while Tether holds controlling stakes in both XXI and Elektron.

Thorn said the board of directors would likely need to establish a special committee, receive an independent assessment of fairness, and obtain approval from a majority of minority shareholders.

Raphael Zagury, CEO of Elektron, who was proposed by Tether to serve as chairman of the merged company, is currently facing lawsuits from Swan Bitcoin in California and the United Kingdom.

Swan alleges that Zagury and other former leaders conspired with Tether in 2024 to hijack a Bitcoin mining venture.

Tether announced at the Bitcoin 2026 event that it now controls over 140,000 BTC, suggesting that XXI could become the leading US listing for this scaling strategy.