Remember Tether’s plan to roll three Bitcoin businesses into one public company? That’s off the table—at least in the original form.
Strike has withdrawn from the deal with Twenty One Capital and Elektron Energy. Jack Mallers left his CEO post at Twenty One to stick with Strike, and Elektron’s founder Raphael Zagury is now running the NYSE-listed Bitcoin firm.
Does this mean Tether is backing off from Bitcoin? No. But it does highlight a reality: jamming a treasury operation, a payments app, and a mining outfit under one roof is a lot messier than they made it sound.
Now Twenty One has to prove it can actually do business—not just sit on a pile of BTC and call it a day.
What Was Tether's Original Plan?
Tether Investments announced the proposal in April 2026. It involved two connected transactions.
Twenty One would first combine with Strike, the Bitcoin payments and financial services company founded by Mallers. The enlarged business would then merge with Elektron Energy, a Bitcoin mining and infrastructure company.
The proposed structure had a clear surface-level logic. Twenty One would contribute more than 43,000 BTC and access to public capital markets. Strike would bring payments, trading, credit products and an existing customer business. Elektron would add Bitcoin production and physical infrastructure.
In its original announcement, Tether said the combined company could connect a strong balance sheet with a profitable operating business and Bitcoin financial services.
The ambition was to build more than another corporate Bitcoin holder. Tether wanted a vertically integrated company spanning treasury management, mining, lending, payments and capital markets.
That structure will not be completed as proposed.
Strike Has Left the Transaction
Twenty One confirmed on July 21 that Strike would remain an independent company and was no longer being considered for a business combination.
This effectively ended the proposed three-way merger. Strike was supposed to provide the customer-facing financial business, so its withdrawal changes the character of any remaining transaction.
Twenty One and Elektron may still combine, but the company has been careful about how it describes that possibility. According to Twenty One's official update, discussions remain at a preliminary stage. No definitive agreement has been signed, and there is no assurance that a transaction will be approved or completed.
The company has not disclosed why Strike withdrew. Any claim that the deal failed because of valuation, control, regulatory concerns or a personal dispute would be speculation.
Jack Mallers Is Returning His Attention to Strike
Mallers resigned as Twenty One's CEO and director effective July 20. He will now focus on Strike during what the company described as its next phase of growth.
His departure was handled through a separation agreement. Twenty One paid cash for 80,393 vested restricted stock units and repurchased 226,860 Class A shares from Mallers at $5.23 each. His unvested RSUs were forfeited without payment.
The transaction should not be described as an open-market sell-off. The shares were purchased directly by Twenty One as part of Mallers' departure arrangement.
Mallers' exit still matters. He was the public face of Twenty One and a large part of its original Bitcoin narrative. Investors who associated the company with his reputation must now evaluate a different management team and a revised business plan.
Raphael Zagury Takes Over
Raphael Zagury replaced Mallers as CEO. He founded Elektron Energy and previously worked at Goldman Sachs, Deutsche Bank and Merrill Lynch.
That background points toward a more institutional direction for Twenty One. Zagury has emphasized governance, operating cash flow and capital allocation rather than judging success only by the size of the company's Bitcoin holdings.
His appointment also increases the likelihood that Elektron will remain central to Twenty One's strategy. However, a transaction between the two companies would require careful review. Zagury leads Twenty One while retaining a close connection to Elektron, and Twenty One has acknowledged that any acquisition would be treated as a related-person transaction.
The board would therefore need to consider valuation, conflicts of interest and whether the deal benefits Twenty One shareholders independently of Tether or Elektron's interests.
Tether Has Not Exited Twenty One
The collapse of the original merger should not be confused with a Tether exit.
Tether remains an important Twenty One shareholder, while Tether CEO Paolo Ardoino serves on its board. Ardoino publicly supported Zagury's appointment and thanked Mallers for leading the company through its December 2025 NYSE listing.
Tether's involvement now appears to be moving from a broad three-company consolidation toward a narrower attempt to build operating businesses around Twenty One's Bitcoin reserves.
That is still a significant change. Strike would have given Twenty One an existing retail-facing platform and a range of financial services. Without it, Twenty One must build, acquire or finance other sources of revenue.
Twenty One Needs More Than a Large Bitcoin Treasury
Twenty One held 43,514 BTC as of March 31, 2026, according to its quarterly SEC filing. It held 43,515 BTC at the end of 2025, meaning the balance was effectively unchanged during the first quarter.
Its Bitcoin-per-share measure also remained unchanged at 12,557 satoshis.
The same filing shows why the operating-company strategy matters. Twenty One had not yet generated revenue during the quarter. It reported an operating loss of approximately $10.6 million and a net loss of about $859.7 million, driven mainly by the decline in the reported fair value of its Bitcoin holdings.
The fair-value loss was an accounting effect rather than an equivalent cash outflow. It nevertheless demonstrates how heavily Twenty One's reported results depend on Bitcoin's market price.
A treasury company can benefit when BTC rises, but it has limited control over that source of value. Operating cash flow would give Twenty One another way to finance acquisitions, service obligations and develop products without relying entirely on new shares, debt or the sale of Bitcoin.
The New Strategy Looks More Like a Holding Company
Twenty One has set out five priorities under Zagury: corporate governance, operating businesses, capital markets, acquisitions and Bitcoin-backed lending.
The company says it wants to own high-quality businesses for the long term and reinvest their cash flow. Its announcement compares the intended model with Berkshire Hathaway, although Twenty One is far too early in its development for that comparison to carry much analytical weight.
The idea is easier to understand than the original three-way merger. Instead of combining several different companies in one transaction, Twenty One could assess individual acquisitions based on expected returns and their contribution to cash flow.
Its proposed lending platform could also allow Bitcoin holders to borrow without selling their BTC. That business may generate interest income, but it introduces credit, collateral and liquidation risks. Success will depend on underwriting standards and risk management, not just demand for Bitcoin-backed loans.
What Could Elektron Add?
Elektron could give Twenty One an operating business tied directly to Bitcoin production. Mining revenue would be easier to identify than gains from simply holding BTC, while owned infrastructure could provide a clearer route toward cash generation.
Mining is not automatically a stable business. Profitability depends on Bitcoin's price, network difficulty, energy costs, equipment performance and access to financing. A miner can generate revenue while still producing weak free cash flow if expansion costs remain high.
Before evaluating a possible Twenty One-Elektron deal, investors would need to see Elektron's financial statements, mining capacity, production costs, debt and proposed valuation. None of those terms has been finalized publicly.
Until a definitive agreement appears, Elektron should be treated as a possible transaction rather than an acquired Twenty One business.
What the Breakup Says About Bitcoin Treasury Companies
The early Bitcoin treasury model was relatively simple: raise capital, buy BTC and try to increase the amount of Bitcoin represented by each share.
That model becomes harder when a company's stock no longer trades at a substantial premium to the value of its Bitcoin. Issuing new shares may then dilute existing investors without creating enough additional BTC per share.
Twenty One's strategic reset reflects that pressure. The company now wants cash-generating businesses that can fund growth and support its balance sheet through different market conditions.
The challenge is execution. A company can move beyond treasury accumulation by building profitable operations, or it can use its Bitcoin narrative to justify expensive acquisitions that add complexity without improving returns.
The cancellation of the Strike transaction may spare Twenty One from a difficult integration. It also removes the most recognizable operating business from the original plan.
Final Thoughts
Tether's three-way Bitcoin merger did not collapse into a complete retreat. Strike chose to remain independent, Mallers returned his attention to the company he founded, and Twenty One moved under the leadership of Elektron's Raphael Zagury.
Twenty One and Elektron may still combine, but no agreement has been finalized. Tether remains involved, and Twenty One still holds one of the largest corporate Bitcoin balances in the public market.
The difficult part begins now. Twenty One has to turn a large BTC treasury into a credible operating company without wasting capital or weakening shareholder exposure to Bitcoin.
Holding 43,514 BTC gives the company a substantial foundation. It does not guarantee that its lending, mining or acquisition strategy will work. The next stage will be judged by cash flow, governance and returns, not by the size of the treasury alone.
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Frequently Asked Questions
What was Tether's proposed Bitcoin merger?
Tether proposed combining Twenty One Capital with Strike and then merging the combined business with Elektron Energy. The aim was to bring Bitcoin reserves, financial services and mining infrastructure under one publicly traded company.
Has the entire merger been cancelled?
The proposed three-way combination has ended because Strike will remain independent. Twenty One and Elektron are still evaluating a possible separate transaction, but no definitive agreement has been signed.
Why did Strike leave the merger?
The companies have not disclosed a specific reason. Explanations involving valuation, control or personal disagreements remain speculation unless confirmed by the parties or future regulatory filings.
