Why Twenty One’s Initial Drop Reflects Decreasing Interest in BTC Companies

Key takeaways

• The NYSE debut of Twenty One Capital experienced a significant decline of nearly 20%, reflecting a cautious approach from investors toward Bitcoin-centered public listings.

• Trading closely to net asset value indicates that the market did not assign a significant premium beyond the firm’s Bitcoin reserves.

• This downturn is indicative of broader market challenges, including Bitcoin volatility, waning interest in SPAC-led listings, and decreasing mNAV premiums.

• The subdued response implies that investors may now anticipate Bitcoin-focused companies to demonstrate viable, enduring revenue strategies rather than relying solely on substantial BTC holdings.

Twenty One Capital, an eagerly anticipated Bitcoin-centric firm, made its public debut on the New York Stock Exchange (NYSE), yet investor sentiment remained cautious, leading to a nearly 20% drop in its shares under the ticker XXI on its initial trading day.

This article analyzes the market’s reaction and its implications for changing investor appetites, the diminishing mNAV premium, and the increasing scrutiny surrounding Bitcoin-related equity listings.

What Twenty One Capital actually is

Twenty One Capital is a Bitcoin-native public company with institutional backing, aiming to become the largest publicly traded Bitcoin (BTC) holder. It entered the public market via a special-purpose acquisition company (SPAC) partnership with Cantor Equity Partners and began trading as XXI.

Upon launch, the company reported holding a treasury of over 43,500 BTC, valued at around $3.9 billion-$4.0 billion, positioning it as one of the leading corporate Bitcoin holders.

The firm was established with a clear mission: to center its corporate structure around Bitcoin strategically. Its founders and investors present it as more than just a treasury vehicle. Jack Mallers, also the founder of Strike, has expressed that Twenty One aims to develop corporate infrastructure for Bitcoin-aligned financial solutions.

This model places Twenty One alongside other digital asset treasury (DATs) firms, with noteworthy distinctions. Its backers include Cantor Fitzgerald, a primary dealer for the Federal Reserve; Tether, the issuer of USDt (USDT) and a key holder of US Treasurys; Bitfinex; and SoftBank. These institutional connections establish Twenty One as one of the most robustly supported Bitcoin-native companies to go public.

The company launched amid a broader trend of publicly listed firms adopting Bitcoin-centric strategies, drawing some inspiration from the expansion model employed by Strategy (previously MicroStrategy). However, Twenty One’s objective is not merely to replicate that model but to pursue revenue-driven growth alongside a substantial Bitcoin reserve.

The debut and the sharp price drop

Given its substantial treasury and formidable backers, many in the market anticipated strong interest during Twenty One’s launch. However, its first trading day on December 9, 2025, yielded an unexpected outcome. The stock price dropped sharply, despite the company’s robust Bitcoin holdings and high-profile institutional backing.

When shares from Cantor Equity Partners’ SPAC converted to XXI, the new stock opened at $10.74, under the prior close of $14.27. After-hours trading saw only a slight recovery. By the end of its first trading day, the shares had fallen approximately 19.97%, concluding at $11.96.

This performance highlighted a broader trend where newly listed crypto-related companies often trade below their pre-merger valuations. This price movement also resulted in the newly public stock being valued at a discount to its underlying cryptocurrency assets, suggesting a potential shift in valuation dynamics for these types of stocks.

Investor caution and Twenty One’s NYSE slide

The significant drop in Twenty One Capital’s stock price was not an isolated incident. It mirrored a convergence of three key market dynamics in late 2025:

• Decline of the multiple-to-net-asset-value (mNAV) premium

• Persistent volatility in crypto markets

• Declining sentiment toward SPAC-led public offerings.

Understanding the muted mNAV valuation

A clear indicator of market caution was that the stock did not trade at a notable premium to its underlying Bitcoin holdings, typically evaluated using the mNAV ratio.

Historically, Bitcoin treasury firms have enjoyed elevated mNAV premiums at various market cycle points. Such premiums have often signified investor confidence in the management’s capacity to generate value beyond the core assets.

However, Twenty One Capital traded at or near its asset value, effectively attributing little to no premium for its business plans or management capabilities. This indicated that the market was treating the stock mainly as a direct and potentially unstable proxy for Bitcoin, rather than factoring in a distinct operational-business premium.

Market volatility and SPAC sentiment

Twenty One Capital made its debut during a challenging time for both the cryptocurrency market and SPAC-driven listings. In the months leading up to the debut, cryptocurrencies were under selling pressure. Bitcoin had dropped over 28% from its October peak, establishing a risk-averse environment where investors showed less inclination to assign generous valuations to crypto-related stocks.

The merger with Cantor Equity Partners provided a SPAC route to becoming publicly traded. While this deal initially propelled the SPAC’s shares significantly higher, by late 2025, enthusiasm for high-profile crypto SPACs had diminished. A history of post-merger underperformance has contributed to investor fatigue and skepticism, often resulting in new listings trading below their pre-merger valuations.

Did you know? The stock trading below the value of its Bitcoin assets exemplifies a valuation paradox, where a newly launched stock is priced lower than the market value of its primary liquid assets.

Market shift: Demand for proven business models

Another factor contributing to investor caution may be the absence of a transparent, proven, revenue-generating operating model at the time of the debut. This indicates some investors are shifting away from purely “Bitcoin treasury” narratives, placing increased emphasis on differentiation and reliable cash flow.

While Twenty One Capital entered the market with substantial Bitcoin holdings, it did so without a detailed, publicly disclosed business strategy or a confirmed timeline. The launch also coincided with intensified scrutiny of the digital asset treasury company sector.

As reported by Reuters, analysts indicate that it is becoming “harder for DATs to raise capital” and that companies “must showcase material differentiation” to justify their trading multiples.

The steep drop in XXI’s share price may suggest an evolving market perspective. Investors may be increasingly focused on a company’s capability to implement a sustainable business model alongside its assets. Public markets could be prioritizing firms that can produce predictable cash flows over those that primarily hold Bitcoin.