Twenty One Capital reports $1.09 billion Q3 net income from bitcoin gains

Twenty One Capital (XXI) reported third-quarter net income of $1.087 billion, almost entirely from $1.093 billion in fair-value gains on its bitcoin holdings, The Block reported, citing an SEC filing. The Tether-backed company held 43,514 BTC as of Sept. 30, valued at roughly $83,700 per bitcoin, plus $102.8 million in cash and cash equivalents.

Chief executive Rapha Zagury told shareholders the profit did not come from operations. "A balance sheet is not a business," he wrote in the quarterly letter. "It is our starting point." He added that "gains from an asset we own are not the same as earnings from businesses we operate," and that building those businesses is the company's job, Unchained reported.

The 10-Q shows the third-quarter profit followed heavy losses earlier in the year. Twenty One posted a $186.5 million net loss for the first nine months of 2026, which implies about $1.27 billion in losses over the first six months, according to Unchained's calculation. The filing also records a $4.8 million operating loss and $1.34 million in interest expense for the three months ended Sept. 30.

About $486.5 million in principal on convertible notes is collateralized by roughly 16,116 BTC, or about 37% of the treasury by Unchained's count. The filing states the company has no binding agreement to buy Elektron, the bitcoin miner Zagury founded, and confirms Twenty One is no longer pursuing Strike, the bitcoin financial services firm founded by former chief executive Jack Mallers. Strike pulled out of the deal in July when Mallers stepped down, and vested options on 1,522,407 shares held by Mallers expired unexercised on Oct. 18, the filing shows.

Zagury said Twenty One is evaluating deals across bitcoin mining, lending, treasury and energy, and has "walked away from opportunities where the economics or terms did not make sense." He said bitcoin remains the benchmark any new spending has to beat, and that buybacks "deserve serious consideration" when shares trade below the value of the assets behind them. David Goldschmidt, former head of Skadden's global capital markets practice, has joined the board and its audit committee, according to the letter.

Twenty One Capital was established in April last year with backing from Tether, Bitfinex and SoftBank, and Tether acquired SoftBank's stake this May. The Elektron and Strike deals were part of a three-way merger that Tether, which holds a stake in Twenty One, proposed in April, Unchained reported. Strike's exit in July, when Mallers stepped down as chief executive, had already been public before the 10-Q confirmed Twenty One is no longer pursuing that deal.

Zagury said he will keep writing to shareholders every quarter. He also framed bitcoin as the benchmark any new spending has to beat: the company would consider buying back shares when they trade below the value of the assets attributable to them, according to the CEO's letter as summarized by The Block.

Twenty One's treasury strategy has drawn close attention since the company was established with backing from Tether, Bitfinex and SoftBank in April last year. The 10-Q's disclosure that no binding Elektron agreement exists removes one of the open questions around how quickly the firm can move beyond holding bitcoin.

The company trades under the ticker XXI. Its shares declined alongside bitcoin over the past month of trading, and the quarterly letter did not commit to a specific date for any buyback program or acquisition, instead describing the criteria that management would apply when weighing the trade-offs.

Its shares fell 19.48% over the past month, compared with bitcoin's 16.06% decline over the same period, according to The Block's data.