And just like that, the JV is gone. Tether, the stablecoin issuer that always seems to be making headlines for… well, something, has officially bought out SoftBank’s stake in their joint crypto investment firm, XXI. This whole setup, launched last year with a cool 42,000 bitcoin contribution (worth a whopping $3.6 billion back then), was supposed to be their big play to build a public company around… wait for it… bitcoin. Groundbreaking.
Who’s Actually Holding the Bag?
Look, SoftBank’s departure feels less like a strategic pivot and more like a quiet exit from a party that’s definitely winding down. Remember when holding a pile of bitcoin was the ultimate power move for corporations? Yeah, that was about as long-lived as a TikTok trend. The report by Bloomberg News — the same one that spilled the beans on this whole Tether-SoftBank shuffle — also pointed out the rather inconvenient fact that Twenty One’s (XXI’s) core business of, you know, investing in bitcoin, has apparently fallen out of favor. Go figure. Shares in XXI are apparently down more than 80% from their peak. That’s not a dip, that’s a full-blown nosedive.
“This transaction reflects the continued development of XXI as the company builds on its foundation and advances its long-term bitcoin strategy,” the stablecoin issuer said in a Wednesday (May 20) news release.
Yeah, “continued development” is a fancy way of saying, “we’re doubling down on a bet that’s gone south.” And “long-term bitcoin strategy”? For a digital asset that’s proven about as stable as a three-legged stool in a hurricane, that sounds less like strategy and more like wishful thinking.
Is This a Sign of the Times?
It’s not just Tether’s little experiment. The original report notes that “many digital-asset treasury companies have either shut down or simply moved away from the model.” This isn’t surprising. My own reporting for Fintech Dose over the past two decades has shown a consistent pattern: hype cycles around new technologies invariably lead to a herd of companies chasing the latest shiny object, only for reality to bite. Bitcoin as a corporate treasury asset? It was a hot idea when BTC was hitting all-time highs. Now? Not so much.
PYMNTS Intelligence research, which the original piece cites, hammers this home. Middle-market companies are using crypto for payments, not for stuffing into their balance sheets. Stablecoins for specific transactions, sure. Bitcoin for recurring workflows? Apparently, that’s about as common as finding a crypto bro who admits they’re wrong. This all paints a rather stark picture: the grand vision of building a public company solely on holding bitcoin is looking decidedly less rosy than it did a year or two ago.
“Even among those that have adopted digital assets, usage remains tightly bounded. Stablecoins are most often used for specific payment functions, such as paying domestic suppliers or receiving cross-border funds,” PYMNTS wrote earlier this year.
This is the pragmatic reality versus the speculative fantasy. Companies need utility, not just a volatile asset that makes their accountants sweat.
What Does This Mean for Tether?
So, why is Tether buying SoftBank out? Is it a vote of confidence in their own ability to steer this ship through choppy waters? Or is it simply easier to cut ties and go it alone, especially when your partner seems eager to bail?
The official line from Tether’s CEO, Paolo Ardoino, is that SoftBank’s involvement brought “credibility, perspective, and discipline” during XXI’s “critical period of formation.” He also added that they “leave behind a company with a stronger foundation, a clearer mandate and an ambitious path ahead.” It’s the standard corporate speak, of course. But if SoftBank was truly that crucial to the foundation, their exit leaves a gaping question mark. What exactly is this ambitious path ahead, and who’s going to fund it when the primary asset class is tanking?
My gut? This is Tether consolidating control. They’ve always been a company that operates on its own terms, and perhaps having SoftBank’s institutional weight — and potentially, their institutional caution — was becoming a hindrance. Now, Tether can pivot XXI however they see fit, without needing to answer to a co-investor who might be getting cold feet about the whole bitcoin-as-treasury strategy. It’s a bold move, or perhaps just a necessary one, given the market’s current mood. Who is actually making money here? Well, right now, it looks like the lawyers and the bankers facilitating the buyout. The jury’s still out on Tether and XXI.
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Frequently Asked Questions
What is Twenty One Capital (XXI)? Twenty One Capital (XXI) was a joint venture between Tether and SoftBank focused on investing in and building a public company around bitcoin. Tether has now bought out SoftBank’s stake.
Is this a good move for Tether? It consolidates Tether’s control over the venture, allowing them to chart their own course. However, it also means Tether is fully exposed to the performance of bitcoin and the viability of its strategy without SoftBank’s institutional backing.
Will this affect the price of Bitcoin? This transaction is primarily an internal ownership change for a specific investment firm. It’s unlikely to have a direct or significant impact on the broader Bitcoin market price.
