Neither Y2K bust nor WeWork’s failure deter SoftBank’s mercurial chief Masayoshi Son to venture again into speculative territory. This time he’s joining forces with a boutique bank-backed blank-check company to launch a crypto investment venture. On April 23, a consortium led by SoftBank and Cantor Fitzgerald’s SPAC arm unveiled Twenty One Capital, a new player in the bitcoin asset game.
The venture’s foundation is substantial and Twenty One Capital is poised to debut with contributions from heavyweight crypto entities Tether and Bitfinex, starting off with more than 42,000 bitcoins, at a formidable valuation of about $3.6 billion, but in a volatile marketplace besieged by Trump’s tariff war.
For Masayoshi Son, bold and high-stakes investments are not new. The infamous bet on WeWork’s unsustainable model still looms large in his portfolio. Yet, staking SoftBank’s credibility — and capital — on a bitcoin-buying entity that mirrors Michael Saylor’s MicroStrategy raises new questions. Unlike physical real estate, Bitcoin’s value swings on sentiment and speculation, making it no less than a wild gamble that only Masayoshi Son can enter.
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Born into poverty and prejudice, Son’s story reads like a fable where a boy who clawed his way out of societal discrimination to reach unimaginable wealth, only to lose it spectacularly, and then rebuild it once more.
The grandson of a Korean miner who moved to Japan during its colonial occupation of Korea, Son grew up in a rough neighborhood in Tosu, Saga Prefecture. His father scraped by raising pigs and chickens, sometimes skirting the law just to put food on the table. Their home was illegally built on land owned by Japanese National Railways, often inviting trouble from the authorities. Throughout his childhood, Son battled the double burden of poverty and racism, bullied at school to the point of contemplating suicide.
But ambition burned fiercely in him to dare to dream high. Inspired by McDonald’s Japan founder Den Fujita, Son made a bold trip to Tokyo to meet his idol uninvited — and surprisingly secured 15 minutes of precious advice. Fujita told him: “Master English, study computers, and move to America.” Son obeyed.
Dropping out of high school in Japan, he flew alone to California. In just three weeks, he graduated from Serramonte High School and then enrolled at UC Berkeley, where he earned degrees in economics and computer science. Even before graduation, he had sold an electronic translator invention to Sharp for $1.7 million and pocketed another $1.5 million from importing second-hand arcade machines.
In 1981, Son founded SoftBank, initially a software distributor and his timing was prophetic as the internet exploded. Son went all in and by 1999, he was crowned the richest man on Earth — only to see $70 billion of his fortune evaporate almost overnight when the dot-com bubble burst two years later. In fact, it was the largest single loss of personal wealth in history.
However, Son did not stay down for long. In the rubble of the tech crash, one gamble saved him: a $20 million investment in an obscure Chinese startup called Alibaba. That single bet turned out to be worth over $100 billion, becoming one of the most legendary venture capital moves ever made.
Still, the gambler’s instincts never subsided. Son plunged billions into Uber, WeWork, and Bitcoin — with mixed results. He lost roughly $130 million speculating on Bitcoin, buying at its 2017 peak and selling in 2019 near its lows. His $16 billion bet on WeWork turned disastrous when the company imploded during its IPO attempt.
Undeterred, Son pushed forward. He steered SoftBank to acquire Britain’s chip giant Arm Holdings for $34 billion in 2016, then tried to sell it to Nvidia in 2020 in a deal that could have valued Arm at $66 billion. When regulators blocked the merger, Son pivoted again, preparing Arm for a blockbuster IPO.
Today, despite the bruises, SoftBank remains a major force in global tech, and Son — once the bullied boy of Tosu — still commands an empire.
Announced amid considerable fanfare, his latest venture — Twenty One Capital plans to go public through a merger with Cantor Equity Partners, a SPAC helmed by Brandon Lutnick, son of Cantor Fitzgerald’s CEO Howard Lutnick. In a complex weave of crypto and corporate interests, Tether and Bitfinex will contribute their bitcoin stockpile — partly financed with cash injections from SoftBank.
Why does the game plan echoes MicroStrategy’s controversial blueprint? It entails use of financial engineering to stockpile more bitcoin, and leveraging premium-priced equity to fuel further acquisitions. It’s a model that relies heavily on the gap between the market capitalization and the underlying crypto assets to fund a perpetual buying spree. For example, it sports a $93 billion valuation — nearly twice the worth of its bitcoin holdings — a dynamic that invites hedge funds to arbitrage its volatility through convertible debt and equity trades.
But beneath the surface, the risks are stark. Financial vehicles built on bitcoin exposure dilute shareholders to maintain liquidity, promising that the ratio of bitcoin per share will inch upward over time. MicroStrategy even coined proprietary metrics like “BTC Yield” and “BTC Gain” to market this narrative though these indicators, while creative, don’t change the fundamental reality: Bitcoin generates no cash flow, and in a liquidation event, equity holders could find themselves in a quandary.
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SoftBank’s early stake illustrates both prospects. The Japanese conglomerate is purchasing shares in Twenty One Capital from Tether equivalent to 10,500 bitcoins — about $891 million based on a recent 10-day average price near $84,864. If Twenty One commands even half the premium MicroStrategy enjoys, SoftBank’s stake could balloon in paper value to $1.7 billion. Indeed, shares of Cantor Equity Partners, the SPAC vehicle facilitating the merger, have already surged nearly threefold since the news broke.
Yet history is repetitive with new tempers of excitement. SPACs, once Wall Street darlings, have fallen from grace. A PitchBook index tracking post-merger SPACs is down nearly 80% over the past three years, reflecting deep investor skepticism. Most now trade well below their initial offering prices.
But none of these hinder the unwavering exuberance of Masayaoshi Son, who’s prepared as ever for a harsher epilogue.