Twenty One Capital Posts $1.09B Profit Mostly From Bitcoin Revaluation

what happened

Twenty One Capital (XXI) reported net income of $1.087 billion for the quarter ended September 30, according to Stocktwits. Nearly all of that came from a $1.093 billion increase in the fair value of its Bitcoin holdings, while operating cash flow played little role. CEO Raphael Zagury told shareholders in a letter that a balance sheet is only a starting point and the company still has to build real operations.

At quarter end, Twenty One held 43,514 BTC, valued at about $83,700 per coin, along with $102.8 million in cash. It had $486.5 million of convertible notes outstanding, backed by roughly 16,116 BTC. Zagury said Bitcoin remains the benchmark that any new capital must beat, and the company is weighing deals in mining, lending and energy, having already dropped some of them.

Zagury also said a share buyback deserves serious thought when the stock trades below the value of its underlying assets, though no buyback has been announced. Bitcoin was trading at $67,094 after falling more than 2% over the previous 24 hours.

why it matters

For investors, the result shows how a crypto-treasury company's quarterly earnings can swing with the token's price rather than with business performance. XXI shares are down more than 43% so far this year and nearly 70% over the past 12 months, so how management deploys its capital is now the key question.

market impact

XXI: earnings track the Bitcoin price, so the shares stay sensitive to moves in crypto markets

• ↔XXI shares mixed — Bitcoin gains lift asset value, but lack of operating income limits investor appeal

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