Supported by institutional partners Cantor Fitzgerald and Tether, investment firm Twenty One Capital is exploring the issuance of U.S. dollar loans secured by Bitcoin collateral. The firm plans to leverage its substantial holdings of over 43,500 BTC (valued at approximately $5.13 billion) to enter the cryptocurrency lending market.
This approach allows corporations to access liquidity without liquidating their Bitcoin holdings, merging decentralized assets with conventional financing structures. The move aligns with expanding crypto-lending activity, as evidenced by Divine Research distributing 30,000 unbacked USDC loans and decentralized finance (DeFi) lending platforms securing $70 billion in locked value during the previous quarter.
Traditional financial giants including JPMorgan Chase are reportedly examining similar crypto-collateralized loan services, signaling institutional adoption momentum. Potential risks involve Bitcoin’s price volatility necessitating possible liquidations, requiring borrowers to implement stringent risk controls.
The initiative represents a strategic integration of crypto assets into mainstream financial services, offering new capital access points while navigating market fluctuation challenges.