Source: Why Twenty One Capital Is More About Volatility Than Bitcoin
Compiled & Translated by: Daisy, ChainCatcher
Editor's Note:
This article is compiled from an in-depth conversation on the Unchained crypto podcast, hosted by Laura Shin with two guests - Jeff Park (former Jump Trading investor, current investment director at 21Shares) and Mark Palmer (Bitwise analyst). The discussion focused on the new Bitcoin holding company 21 Capital, established by Tether, SoftBank, Bitfinex, and Cantor, with the goal of increasing Bitcoin per share (BPS) and Bitcoin return rate (BRR), viewed as a new attempt at Bitcoin "corporatization" following MicroStrategy.
The conversation revolved around four core aspects: the behavioral logic of strategic investors, Tether and global capital structure reconstruction, Japanese capital and US Treasury arbitrage paths, and whether Solana can replicate Bitcoin's financialization model. The content covers macro financial trends, capital structure design, investment preference differences, and narrative capabilities.
Below is the compilation and translation of the interview.
TL;DR:
- Strategic investors focus on volatility rather than profitability, with 21 Capital's stock pricing logic based on volatility realization.
- The establishment of 21 Capital marks a new stage of Bitcoin corporatization, initiated by multiple international institutions.
- Tether benefits from US dollar arbitrage, with SoftBank representing long-suppressed Japanese capital, both achieving global arbitrage through Bitcoin.
- The shift in US regulatory environment is driving institutional entry, with stablecoin and digital asset legislation seen as a key window.
- Investors' choices are based not only on product structure but also on value and narrative preferences (Saylor vs Mallers).
- Solana's financialization path has structural differences, with inflation mechanisms, staking models, and asset credit not comparable to Bitcoin.
Mark Palmer: Cantor's involvement reflects Wall Street's changing attitude towards crypto. Previously hesitant due to unclear regulations, now with a policy shift towards friendliness, banks can participate more confidently while protecting customer interests. The changing regulatory environment has created opportunities for them.
Jeff Park: I completely agree. Cantor is a bridge connecting US and global capital. Against the backdrop of Tether and SoftBank not being regulated by the US, Cantor has aligned with US interests. This is also one of the reasons why Tether chose to collaborate with SoftBank in Japan. As important allies, the US and Japan, through the triangular structure of Tether, SoftBank, and Cantor, closely combine Bitcoin financialization with geopolitical strategy.
Laura Shin: We've discussed geopolitics, regulatory changes, and market stages. What are your thoughts on 21 Capital's market entry timing? How does it differ from MicroStrategy's initial launch?
Jeff Park: In 2020, MicroStrategy entered Bitcoin during heightened pandemic and inflation concerns, with institutional entries by PayPal and the rise of DeFi, making it an ideal time. Bitcoin's significant rise in 2021 validated this decision. Now, with the US regulatory environment about to change, institutional funds are expected to enter, which is a very favorable market entry timing for 21 Capital.
Mark Palmer: The 2020 pandemic and loose policies triggered unease about fiat currency, leading Saylor to turn to Bitcoin. Japan is currently experiencing a similar awakening. Despite long-term cooperation with the global order and maintaining yen depreciation, Japan is accused by the US of manipulating exchange rates, sparking domestic resentment and policy reflection. Bitcoin once again becomes a hedging tool, a transformation remarkably similar to before.
Laura Shin: Without providing investment advice, how do you view Bitcoin spot ETFs, MicroStrategy, and 21 Capital in terms of suitable investors?
Jeff Park: The key is acceptance of leverage risk. MicroStrategy and 21 Capital offer leveraged Bitcoin exposure, with higher returns during rises and greater volatility during drops; ETFs are closer to spot assets with lower volatility. Bitcoin investors confident in its potential can consider leveraged tools for higher returns.
Mark Palmer: Investment choices depend not just on the product, but also on values. Some align with Saylor's American ideals, while others prefer Jack Mallers' technology-driven and youthful vision. 21 Capital, backed by international capital, might not be seen as a "pure American company". When return differences narrow, cultural identity and ideological alignment often determine the final choice.
Can Solana be Financialized? Bitcoin's Path Difficult to Replicate
Laura Shin: Among various Bitcoin-related companies, which strategies or companies do you think are more likely to succeed?
Mark Palmer: The winners will be those creating maximum volatility with minimal capital. In a highly structured financial era, markets prefer volatility. MicroStrategy has a complex capital structure, while 21 Capital focuses on a simple structure. If they can generate higher volatility, the market might favor them more.
Jeff Park: I agree. Volatility is key, but the paths can differ. MicroStrategy expands financing channels, adapting to different investment preferences, like convertible arbitrage funds. In contrast, 21 Capital chooses a more concise structure. Ultimately, it depends on which investor will follow—Saylor or Mallers. Jack Mallers possesses both technical and financial capabilities, along with the influence of a "preacher".
Mark Palmer: In today's market, storytelling ability is crucial. Saylor excels at winning resonance through language and metaphors, which is also an important factor in company success. Now, many Solana-based projects are starting to value this, and I often ask them, "Who is your Chief Meme Officer?"
Laura Shin: How do you view Solana's potential to replicate Bitcoin's equity investment model? Given their significant asset structure differences, how might this model perform differently on Solana?
Jeff Park: Solana and Bitcoin have fundamental structural differences. Bitcoin has a fixed supply, while Solana has an inflation mechanism, supporting staking and validator node operations, which can bring returns and flexibility. The core is that the asset's inherent properties determine different ways of measuring its value.
Laura Shin: So you believe Solana's inflation mechanism might make such investment tools less attractive compared to Bitcoin, correct?
Jeff Park: This depends on investor preferences. Solana offers direct staking returns, while Bitcoin achieves compound growth indirectly through holdings, representing two different return models.
Mark Palmer: It can be viewed from three aspects: first, credit adaptability—Bitcoin is easier to assess as collateral, while Solana's risk rating is still unstable; second, volatility—Solana is more intense, which can be advantageous for certain financial instruments; third, asset productivity—Bitcoin ETF structure is clear, while Solana relies more on actively managed companies to release its ecosystem value, especially when staking mechanisms are not yet clear.
Laura Shin: So you believe that even if an asset has value, without a Chief Meme Officer, it's difficult to spark market enthusiasm, right?
Mark Palmer: Completely agree.
