Tether-backed Bitcoin-focused company Twenty One Capital has reported a $413.5 million net loss for the second quarter of 2026 after Bitcoin’s decline reduced the value of its holdings.
Bitcoin losses have dominated Twenty One Capital’s results
According to Twenty One Capital’s second-quarter financial report, a $401.5 million decline in the value of its Bitcoin holdings accounted for most of the company’s quarterly loss.
Twenty One Capital’s latest loss has shown how strongly its financial statements depend on Bitcoin’s price at the end of each reporting period. Because the company holds the cryptocurrency as its main asset, changes in Bitcoin’s fair value pass through its reported earnings even when it does not sell the coins.
The $401.5 million reduction tied to Bitcoin represented about 97% of the total second-quarter loss. Remaining expenses accounted for roughly $12 million, based on the two figures in the report, although the source did not provide a complete breakdown of those costs.
A similar effect appeared in the company’s first-quarter accounts. Twenty One Capital reported an $859.7 million net loss for the three months ended March 31, according to its SEC quarterly filing. An $847.8 million decline in the fair value of its Bitcoin holdings caused most of that loss.
As of March 31, Twenty One held 43,514 $BTC with a reported fair value of $2.95 billion, down from $3.80 billion at the end of 2025. Its cost basis for the holdings stood at about $3.69 billion, while the price used to value each coin fell from $87,316 on Dec. 31 to $67,832 on March 31.
Combined, the first two quarters have produced reported net losses of about $1.27 billion. Nearly $1.25 billion of that amount came from the lower accounting value of the company’s Bitcoin, based on the first-quarter filing and the second-quarter figures.
Such fair-value losses do not necessarily represent cash leaving the business. The first-quarter filing shows that Twenty One sold one Bitcoin and recorded a $3,180 gain on that disposal, while the much larger loss came from revaluing the coins it continued to own. Bitcoin’s closing price in later reporting periods can reverse part of a previous loss or create another expense under the same accounting treatment.
Twenty One Capital plans businesses beyond its treasury
New CEO Raphael Zagury has said Twenty One cannot rely only on holding Bitcoin and must develop businesses capable of producing cash flow. His plan centers on buying operating companies, using debt and equity markets to raise capital, and offering loans secured by Bitcoin.
Zagury took over from Strike founder Jack Mallers on July 20, according to the company’s leadership announcement. Mallers stepped down to concentrate on Strike but remained involved in the leadership handover.
“Twenty One holds one of the largest Bitcoin balance sheets in the public markets,” Zagury said in the announcement.
“My job is to build the operating company around it, with the discipline, governance, and executional rigor of an institution.”
The company identified five strategic priorities when Zagury became CEO. In addition to acquisitions and Bitcoin financial services, management plans to develop its capital markets operation, manage its Bitcoin reserves through debt and equity transactions, and keep a holding-company structure for acquired businesses.
Zagury has experience across both traditional finance and Bitcoin infrastructure. Before taking the top job, he served as a Twenty One director and interim audit committee chair. His earlier roles included positions at Goldman Sachs, Deutsche Bank, and Merrill Lynch, while he also helped lead Bitcoin mining and infrastructure company Elektron Energy.
In May, Twenty One said it was considering a combination with Strike and Elektron that would have joined payments, mining, treasury management, and financial services. The company later removed Strike from consideration after Mallers left the CEO position, leaving the payments business as an independent company.
Tether has tightened control of the Bitcoin company
Twenty One began with support from Tether, Bitfinex, SoftBank, and Cantor Equity Partners. Its 2025 launch plan valued the business at $3.6 billion and called for more than 42,000 $BTC, alongside capital raised through convertible notes and a private investment in public equity.
Tether later acquired SoftBank’s full interest in the company, crypto.news reported in May. The transaction removed a large outside shareholder and increased Tether’s influence over the listed company.
The original structure had included Bitcoin contributions from Tether, Bitfinex and SoftBank. A separate financing package consisted of convertible senior secured notes and common equity, with the proceeds allocated mainly to additional Bitcoin purchases and corporate expenses.
By the time Twenty One entered the public market in December 2025, its treasury had grown to more than 43,500 $BTC. Earlier coverage of its debut noted that falling Bitcoin prices were already putting pressure on the stock and other digital-asset treasury companies.
Investors were also questioning whether Twenty One could develop enough operating revenue to distinguish its shares from direct Bitcoin holdings or spot exchange-traded funds. At the time, the company employed four full-time workers and had not provided a product-launch schedule.
Under Zagury, management has placed more attention on acquiring businesses and generating income rather than measuring performance only by the size of the Bitcoin reserve. Twenty One still uses Bitcoin per share, expressed in satoshis, as one of its internal performance measures.
The company’s first-quarter filing showed 12,557 satoshis per Class A share at both Dec. 31 and March 31. Twenty One had 346.5 million Class A shares outstanding at the end of the quarter, while its Bitcoin balance fell by one coin.
U.S. investors face Bitcoin and company-specific risks
Twenty One trades on the New York Stock Exchange under the ticker XXI, giving U.S. investors access to its Bitcoin holdings through a regulated public stock. That exposure also includes corporate expenses, debt, management decisions, and share issuance, which do not apply when an investor holds Bitcoin directly.
The shares were trading near $4.59 on Aug. 11, while Bitcoin changed hands around $63,802. Because XXI represents an operating company rather than a spot Bitcoin ETF, its stock price can trade above or below the value of the Bitcoin attributable to each share.
Twenty One has also used Bitcoin to support its financing. Its first-quarter SEC report listed about $484.4 million of convertible notes and said 16,116 $BTC served as collateral for them. Management stated that the pledged coins could not be treated as an available source of liquidity while they remained tied to the notes.
At the end of March, the company held $114.1 million in cash and $117.9 million in net working capital. Management said those resources were sufficient to fund operations for at least one year from the filing date and did not expect to sell Bitcoin during that period to meet ordinary liquidity needs.
A governance issue emerged after SoftBank’s representatives left the board following Tether’s purchase. As crypto.news covered in June, the NYSE warned Twenty One that its audit committee no longer met the exchange’s independence rules.
The exchange gave the company until June 5 to appoint a qualified independent audit committee member before attaching a below-compliance indicator to its listing. Twenty One appointed an independent director on June 8, according to its investor-relations records.
