Tether’s Bitcoin Territory Expands Further: In-Depth Analysis of the Merger of XXI, Strike, and Elektron

On April 29, 2026, the investment division Tether Investments of stablecoin issuer Tether officially announced a proposal to facilitate two merger transactions between Twenty-One Capital (XXI), the Bitcoin financial services platform Strike, and Bitcoin mining company Elektron Energy. If the deal is successfully completed, XXI will upgrade from a “treasury-type” listed company primarily holding Bitcoin as its core asset to an integrated platform combining mining capacity, financial infrastructure, and institutional capital channels. Following the announcement, XXI’s stock price rose approximately 8% in after-hours trading. As of April 30, 2026, the price of Bitcoin on the Gate market was around $75,000 to $76,000 USD.

How the structure of the tripartite merger proposal operates

Tether Investments’ proposal adopts a two-stage merger approach. In the first stage, XXI merges with Bitcoin financial services company Strike, integrating Strike’s global distribution network covering over 100 countries, compliance infrastructure, and Bitcoin lending products into the XXI ecosystem. In the second stage, the merged entity will further merge with Elektron Energy, incorporating Elektron’s large-scale mining operations into the same publicly listed entity. Tether has explicitly stated it will vote in favor of these transactions, but specific terms, timelines, and governance arrangements have not yet been disclosed and will be gradually announced in subsequent discussions.

This step-by-step design—“financial services first, mining capacity later”—demonstrates a clear integration logic: Strike provides user access and revenue streams, Elektron supplies underlying computing power and asset production, and XXI offers a listed company platform with capital leverage. The combined business is not merely asset stacking but a complete business cycle from “holding” to “producing” to “distributing.”

What are the respective business capabilities and strategic positioning of each party?

XXI: Driven by the scale of Bitcoin holdings to enhance the company’s platform value. According to Bitcoin Treasuries data, XXI holds over 43,500 Bitcoin on its balance sheet, valued at approximately $3.26B USD at a price of $75,000 USD per Bitcoin, making it the second-largest publicly listed Bitcoin treasury company globally, after MicroStrategy. XXI listed on the New York Stock Exchange in December 2025 through a SPAC merger, with major shareholders including Tether, Bitfinex, and Strike’s founder and current CEO Jack Mallers. However, since 2026, XXI’s stock has declined over 10%, reflecting ongoing market skepticism about the valuation model of “pure treasury-type” Bitcoin companies.

Strike: Connecting global users with Bitcoin financial interfaces. Founded by Jack Mallers, Strike offers Bitcoin buying, holding, trading, and collateralized lending services in over 100 countries worldwide. At the same time as the merger proposal was announced, Strike launched “Volatility Proof Loans,” allowing borrowers to avoid forced liquidation due to sharp price fluctuations by paying an additional fee. The credit limit for this loan product reached $2.1 billion USD, with the minimum interest rate adjusted to 7.49%, and a credit agreement has been signed with Tether.

Elektron: The core infrastructure supporting mining capacity. Elektron Energy, led by Raphael Zagury, manages approximately 50 EH/s of Bitcoin hash power, about 5% of the total network hash rate, and has mined over 5,500 Bitcoin. The total production cost per Bitcoin is below $60,000 USD, meaning that at Bitcoin prices around $75,000 USD, Elektron’s mining operations still have significant profit margins. Tether has planned to nominate Zagury as the president of the post-merger entity, leveraging his management experience in mining operations and capital markets.

What is the deeper strategic logic behind Tether’s push for the merger?

Tether’s move is not an isolated case but part of a strategic path extending from its core stablecoin business into the Bitcoin hash power industry chain. Tether Investments owns stakes in over 120 companies across fields such as artificial intelligence, energy, fintech, and biotech. In Bitcoin mining, Tether has invested over $20 billion USD in computing power and energy infrastructure, holding more than 100,000 Bitcoin, and has developed modular mining hardware in collaboration with Canaan and ACME Swisstech, promoting deep integration of mining hardware and software.

Logically, Tether aims to transform XXI from a “passive holder” into an “active asset accumulator.” Traditional treasury-type companies rely on Bitcoin price appreciation for book gains, but after integrating mining capacity, the merged entity will gain the ability to continuously produce Bitcoin at below-market costs; after integrating financial services, it will also generate recurring income from staking and lending. The cash flow from mining and financial services provides short-term financial support, while the appreciation of the 43,500 Bitcoin reserves offers long-term value anchoring. Tether’s fundamental goal is to create a vertically integrated Bitcoin value cycle that can operate sustainably without relying on external market fluctuations.

What valuation signals are revealed by the market’s reaction to XVIII’s capital market response?

The market’s reaction to the merger proposal offers a signal that warrants cautious interpretation. After the announcement, XXI’s stock price increased about 8% in after-hours trading, indicating market recognition of the strategic value of the integration direction. However, this rebound occurred against a backdrop where XXI’s stock has declined over 10% since 2026, and current reports do not mention significant trading volume. Some analysts point out that XXI’s stock has fallen nearly 50% over the past 120 days, suggesting the market has developed structural doubts about the valuation model of a “pure treasury-type” Bitcoin company.

Therefore, this recent rise more reflects a “directional adjustment” in pricing rather than a “valuation reappraisal.” The core concern in capital markets is whether the combined platform can improve XXI’s profitability and cash flow structure, and whether it can provide new valuation metrics based on EBITDA. Whether the merged entity can successfully transition from a treasury-type company to an operational platform will directly determine if its valuation logic can be successfully reconstructed.

How will the competitive landscape of Bitcoin mining evolve?

Since 2026, the trend of consolidation in Bitcoin mining has accelerated significantly. In March 2026, Sphere 3D announced a merger agreement with Cathedra Bitcoin; Olenox also announced a merger with Brazil’s CS Digital, focusing on developing off-grid low-cost mining and AI data center infrastructure; American Bitcoin announced in April an expansion of mining machines to 89,242 units, increasing hash rate to 28.1 EH/s.

Among these consolidation cases, the differentiated path represented by the tripartite merger driven by Tether is the clearest: it is not simply horizontal cooperation among mining companies to expand hash power, but rather the integration of treasury reserves, financial services, and mining capacity into the same listed platform—an end-to-end vertical integration across different segments of the industry chain. If this model proves effective, it could reshape the valuation models and competitive dynamics of publicly listed Bitcoin companies.

What risk dimensions should be continuously monitored?

First, execution risk. The specific terms, final timeline, and governance arrangements have not yet been disclosed. The complex legal and operational integration involved in merging large publicly listed companies with financial technology and mining assets presents significant uncertainties about whether the three different-stage business entities can be smoothly integrated.

Second, regulatory risk. The post-merger entity will span Bitcoin mining, financial services, and public capital markets, potentially facing stricter regulatory scrutiny across multiple jurisdictions, especially regarding asset transparency in collateralized lending and Bitcoin’s energy consumption.

Third, Bitcoin price trends and industry structural risks. If Bitcoin prices remain at current levels or decline further over the long term, even if the financial structure of the merged entity is theoretically more robust, mining profitability will still face direct challenges. Additionally, the Bitcoin industry itself is experiencing structural differentiation: some miners are shifting toward AI data centers for diversification, while Tether continues to increase its hash power investments. These divergent paths will lead to different competitive pressures, and the merged entity will need to continuously demonstrate the resilience of its business model under its strategic framework.

Summary

The tripartite merger driven by Tether Investments among XXI, Strike, and Elektron Energy marks a significant attempt for Bitcoin listed companies to evolve from simple holdings to vertically integrated platforms. By consolidating 43,514 Bitcoin reserves, global Bitcoin financial services, and 50 EH/s of mining capacity into a single listed entity, the merger, if realized, will create a comprehensive Bitcoin platform with production, distribution, and capital operation capabilities. The 8% after-hours rise in XXI’s stock price reflects initial market recognition of this direction, but the real test lies in the execution of integration, regulatory adaptation, and the evolution of Bitcoin’s market cycle. This proposal also provides a key window for users interested in Gate’s platform and crypto asset dynamics to understand the evolving industry capital landscape.

FAQ

Q1: What is the current status of the tripartite merger proposal?

A1: Tether Investments proposed a two-step merger plan on April 29, 2026, indicating support for the transaction. Specific terms, timelines, and governance details have not yet been disclosed and will be announced in subsequent discussions.

Q2: How will the merger change XXI’s business structure?

A2: If completed, XXI will transform from a treasury-type company mainly holding Bitcoin into an integrated operational platform combining mining output, financial revenue, and treasury reserves, covering asset holdings, mining, fintech, and capital markets.

Q3: What roles do Strike and Elektron play in the merger?

A3: Strike provides Bitcoin trading, holding, and lending services across over 100 countries; Elektron contributes approximately 50 EH/s of Bitcoin hash power with a mining cost below $60,000 USD per Bitcoin. They constitute the “revenue side” and “production side” of the merged platform, respectively.

Q4: How will the management team be arranged after the merger?

A4: Tether Investments plans to nominate Elektron founder Raphael Zagury as president of the post-merger entity, overseeing capital markets and operations; Strike founder Jack Mallers will continue focusing on products, branding, and consumer Bitcoin services.

Q5: What are the main concerns in the market regarding this merger?

A5: Key concerns include whether the integration can be executed smoothly and regulatory compliance risks. Additionally, the profitability of mining affects the valuation of the merged entity, which is somewhat dependent on Bitcoin’s price, and the industry is experiencing structural divergence as some miners pivot to AI and other sectors.