Twenty One Capital lost around 14% on Tuesday and its co-founder handed the CEO seat to Raphael Zagury, a Wall Street operator whose message to investors sounds nothing like Mallers'.
Twenty One Capital lost its co-founder and its merger plan in a single announcement on Tuesday. Jack Mallers stepped down as chief executive effective 20 July to return full-time to Strike, the bitcoin payments company he founded, and Tether killed the proposed three-way combination of Twenty One, Strike and Elektron Energy that had been the entire strategic case since April.
Shares in the NYSE-listed vehicle (ticker XXI) fell around 14% on Tuesday, extending a slide that has taken the stock from a 52-week high of $31.51 to a low of $4.81. Tether, which controls Twenty One, named Raphael Zagury as the new CEO. Zagury founded Elektron Energy and previously held managing director roles at Deutsche Bank and Merrill Lynch, and a vice president position at Goldman Sachs. Where Mallers built the company on the promise of aggressive bitcoin accumulation, Zagury is offering something else. Per Tether's announcement, he told investors Twenty One "should be measured by the cash flow it generates and the discipline with which it allocates capital."
That is not what Twenty One was sold as. When the company listed on the New York Stock Exchange in December 2025 through a SPAC merger with Cantor Equity Partners, the pitch was direct: a public vehicle for bitcoin accumulation without the ancillary distractions of a mining or payments business. Mallers spoke about it in absolute terms. Tether's controlling stake and Cantor's rolodex were supposed to open the door to buying at a scale no other treasury company could match. Twenty One still holds 43,514 BTC, worth roughly $2.9 billion at Tuesday's prices, ranking it second only to Michael Saylor's Strategy among corporate bitcoin holders.
Then Tether shifted the story in April. At the Bitcoin Conference in Las Vegas, it pitched combining Twenty One with Strike and Elektron Energy into "the premier listed bitcoin company in the world" — treasury, payments and mining under one ticker. Mallers endorsed the plan publicly and was set to run the combined entity, with Zagury named as president. Three months later, Strike is out, the three-way deal is off, and Tether has confirmed it. Only a potential two-way combination between Twenty One and Elektron remains under discussion, and even that has not been guaranteed.
Mallers' tweet was terse.
The silence about Twenty One tells its own story. The public rationale is that his life's work is bitcoin payments, Strike is where that work lives, and both statements are true. But Strike operates in more than 100 countries, has its own capital backers, and would have lost independence and brand identity inside a Tether-led public vehicle. The math of walking away is easier than the math of merging.
For Tether, the setback lands at an awkward moment. Its position in Twenty One is now the last operating bitcoin arm it fully controls after buying out SoftBank's roughly 26 per cent stake for $679 million in May. The three-way merger was meant to give that stake a credible corporate structure. Instead, Twenty One is a treasury company without a strategic thesis, run by an operator with no history of retail bitcoin advocacy, and trading at a discount that keeps widening.
Zagury's Wall Street resume is the tell. Managing director roles at two bulge-bracket banks and a Goldman VP stint are not the profile of a treasury company executive selling shares to bitcoiners. They are the profile of a CFO or restructuring specialist. His stated priorities — cash flow, capital discipline, acquiring operating businesses, and building out bitcoin-backed lending — sound closer to a financial services firm than a passive holdings vehicle. The change is a strategy pivot, whether Tether calls it that or not.
The broader treasury sector has been under pressure all year. In April, Galaxy Digital warned that at least five crypto treasury firms were facing forced asset sales or closure as their net-asset-value discounts widened, and Strategy itself has been selling bitcoin to cover preferred dividends. Twenty One had positioned itself as immune to those pressures because of Tether's balance sheet backing. That claim now needs a new proof.
Tether has not said whether it plans to inject more capital, restructure the balance sheet, or continue with the Elektron combination alone. Twenty One's next earnings call will be the first meaningful test of whether Zagury's language about cash flow and discipline can survive contact with a shareholder base that bought a bitcoin-maximalist story and got handed a Wall Street executive instead.
XXI closed Tuesday at $4.54.
