Twenty One Capital Ditches 'Free Money' Playbook for Cash-Generating Businesses

Raphael Zagury, the newly appointed CEO of Twenty One Capital, a public company focused on Bitcoin (BTC), has sounded a warning about the viability of the premium-funded model behind many Bitcoin treasury firms. Speaking in a July 22 fireside chat with the SEC, Zagury stated that 'there's no free money forever' and that the market-value premiums enjoyed by these companies cannot be sustained indefinitely.

Zagury believes that the only way to ensure long-term returns is to build cash-generating businesses around the company's BTC balance sheet. Twenty One Capital has already outlined an operating-company model in May, which aims to buy or build operating businesses, expand capital-markets capabilities, and develop Bitcoin-backed financial products.

Zagury also highlighted the example of mining as a potential source of cash generation, comparing it to Berkshire Hathaway's insurance business, which provides funds for reinvestment. However, he acknowledged that building such a model would be challenging and has not yet been implemented by Twenty One Capital.