Building the Berkshire Hathaway of Bitcoin | Twenty One Capital CEO Rapha Zagury

I have spent a lot of time looking at how crypto companies try to model themselves after legacy giants. Usually, it is a disaster. Startups try to act like Goldman Sachs before they have a product, or they try to mimic Google while burning through seed rounds on fancy ergonomic chairs. But there is a new movement of builders trying to replicate the Warren Buffett model using Bitcoin as the core engine. One of the most prominent examples right now is Twenty One Capital.

Led by Rapha Zagury, the firm is sitting on roughly 43,000 BTC. On the surface, it looks like just another institutional holding company. But if you look at the mechanics of what they are doing, it is a masterclass in capital allocation for a post-fiat world. They aren't just buying Bitcoin; they are trying to create a vehicle that trades at a specific relationship to its net asset value, or what they call mNAV, while leveraging heavy-hitting partnerships like Tether to create a permanent capital advantage.

The Discount Trap and the Opportunity

For most builders, the idea of a discount on Bitcoin sounds like a scam or a dream. But in the world of public and private equities, it is a common headache. When you have a company whose primary value is a pile of assets, the market often values the company at less than the sum of those assets. Zagury is dealing with this head-on. Twenty One Capital currently holds its massive Bitcoin position at a discount, which effectively means if you could buy the company, you would be getting the Bitcoin for less than the market price.

This is where the Berkshire Hathaway comparison comes in. Buffett did not get rich just by picking good stocks; he got rich by using the "float" from his insurance companies to buy assets. He had cheap, permanent capital that he could deploy when everyone else was panicking. Zagury is trying to flip this for the Bitcoin age. By managing the mNAV and utilizing share buybacks, the firm is trying to signal to the market that they know exactly what their floor is. If the market underprices them, they buy back their own shares, essentially increasing the Bitcoin-per-share for everyone who stays.

Why the Tether Partnership Changes the Math

Every founder knows that the biggest threat to a long-term vision is the cost of capital. If you have to raise money every six months to keep the lights on, you are not a builder; you are a professional fundraiser. Twenty One Capital has solved this by aligning with Tether. Tether is the undisputed king of liquidity in this space, and having their backing provides what Zagury describes as a permanent edge.

This is not just about having a big name on the cap table. It is about stability. Tether’s involvement implies a level of liquidity and staying power that most crypto funds simply do not have. In a market where a 30% drop in price can cause most firms to margin call their own dreams, having a partner with deep, stable reserves allows you to play the long game. It allows Twenty One Capital to behave like an owner, not a trader.

Building for the Long Term

The lesson for builders here is not "go buy 40,000 Bitcoin." Most of us can't do that. The lesson is about asset-liability matching and the importance of a clear valuation metric. Zagury is obsessed with the mNAV because it gives investors a clear yardstick. In the AI and crypto space, we are often guilty of using "vanity metrics" like user signups or total value locked that doesn't actually translate to long-term sustainability.

Twenty One Capital is building a boring business on top of an exciting asset. That is the secret sauce. While everyone else is trying to launch the next high-leverage protocol or a meme coin with a dog on it, they are focusing on the accounting and the capital structure. They are treating Bitcoin as the reserve asset of a corporation, much like Berkshire treats cash and cash equivalents.

The Skeptic's View

Of course, there is a catch. The Berkshire model works because Buffett is a genius at picking cash-flowing businesses to tuck under his umbrella. Simply holding Bitcoin is a bet on the price of the asset. To truly be the Berkshire of Bitcoin, Twenty One Capital will eventually need to do more than just manage a discount. They will need to deploy that capital into productive assets that generate more Bitcoin. Zagury seems aware of this, but the execution is where most people fail.

If they can successfully pivot from being a "Bitcoin pile" to being a "Bitcoin engine" that funds and acquires other builders in the space, they will have created the first truly sovereign institutional vehicle. But until then, they are a very large, very well-managed vault.

What This Means for the Ecosystem

If more companies follow this path, we are going to see a massive shift in how crypto startups are funded. Instead of relying on VCs who need a 10x return in five years to satisfy their limited partners, we might see the rise of these "permanent capital" holding companies. These firms don't need to exit. They just want to accumulate more of the best assets in the world.

For a founder, getting investment from a firm like this is much more attractive than a standard VC. It means your lead investor isn't looking for the door the moment things get difficult. They are looking to build a conglomerate. That is a much healthier foundation for the next decade of tech development.

Takeaway for Builders

Stop looking at your company as a series of product launches and start looking at it as a capital allocation vehicle. Whether you are building in AI or crypto, your primary job is to turn capital into more value. If you don't have a clear understanding of your "net asset value" or a path to permanent capital, you are just renting your business from your investors. Zagury and Twenty One Capital are showing that even in a volatile market, the old-school rules of accounting and patience still win.

Read the original at Bitcoin Magazine →