Twenty One Capital CEO Says ‘A Balance Sheet Is Not A Business’ After $1 Billion Bitcoin-Driven Gain

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Twenty One Capital (XXI) CEO Raphael Zagury told shareholders that the company needed to build a real business around its Bitcoin (BTC) holdings, adding that 'Bitcoin remains our…

Twenty One Capital (XXI) CEO Raphael Zagury told shareholders that the company needed to build a real business around its Bitcoin (BTC) holdings, adding that 'Bitcoin remains our benchmark.' The company's profit from Bitcoin alone stood at a little over $1 billion in its third quarter.

In a shareholder letter, Zagury explained that "A balance sheet is not a business. It is our starting point." The company reported net income of $1.087 billion for the quarter that ended on September 30. Zagury said that result was "primarily driven by a $1.093 billion fair-value gain" on its Bitcoin, "rather than operating cash flow."

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"We welcome Bitcoin's appreciation. But gains from an asset we own are not the same as earnings from businesses we operate," he wrote, adding that, "Building the latter is our job."

XXI stock was down over 1% during overnight trading. On Stocktwits, retail sentiment around XXI remained in the 'bullish' zone, while chatter around it shifted to 'normal' from 'low' levels over the past day.

Twenty One ended the September quarter with 43,514 BTC, valued at about $83,700 per coin, and $102.8 million in cash. It had $486.5 million in convertible notes outstanding, secured by about 16,116 BTC. Zagury said Bitcoin was the bar any new investment had to clear.

Any capital the company deployed "should justify the risk, complexity, and opportunity cost of not simply owning more Bitcoin," he wrote. The company was looking at deals in mining, lending and energy, according to the letter. Zagury said it has already walked away from some of them and expected to walk away from more.

Bitcoin's price was trading at $67,094, down over 2% in the last 24 hours. On Stocktwits, Bitcoin was one of the top trending tickers among cryptocurrencies at the time of writing.

Retail sentiment around BTCnearly 70% remained in the 'extremely bearish' zone, while…

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