Tether-controlled investment firm XXI Capital has shelved an ambitious three-way merger involving Jack Mallers’ Strike and energy player Elektron Energy, as Mallers relinquishes his role as chief executive to refocus on his core bitcoin payments company.
Raphael Zagury has been appointed CEO of XXI Capital, replacing Mallers, who is returning full-time to Strike, the bitcoin-focused financial services firm he founded. XXI Capital, which is backed and controlled by stablecoin issuer Tether, is now exploring a slimmer, two-way deal with Elektron Energy after formally dropping Strike from the transaction.
Three-way deal abandoned
The proposed merger had aimed to combine XXI Capital (also branded Twenty One Capital), Strike and Elektron Energy into a single group, bringing together digital asset investment, bitcoin payments infrastructure and bitcoin-linked energy operations under one umbrella.
That structure has now been abandoned, with XXI Capital confirming that Strike will no longer participate in any combination. The move represents a notable shift in strategy for Tether’s investment arm, which has been positioning itself as a major player in the bitcoin ecosystem.
XXI Capital is instead weighing a potential two-entity tie-up with Elektron Energy as it reassesses its corporate direction and capital deployment priorities. No final decision has been announced on whether the revised two-way combination will proceed.
Mallers refocuses on Strike
Mallers, one of the most recognisable figures in bitcoin payments, is stepping away from formal leadership at XXI Capital to concentrate on Strike’s growth as a dedicated bitcoin financial services platform.
Strike has been building out consumer and institutional offerings based on the Lightning Network and dollar-bitcoin rails, and Mallers’ departure from XXI Capital underscores his intention to double down on that core business rather than pursue a broader investment conglomerate structure.
While no detailed rationale for the change has been given publicly, the decision to pull Strike out of the merger talks suggests a desire to keep its operations and brand independent from Tether’s investment vehicle and energy-linked ventures.
Tether rethinks bitcoin investment strategy
The leadership reshuffle and aborted three-way merger come as Tether continues to expand beyond its flagship USDT stablecoin into bitcoin mining, energy infrastructure and venture-style investments in the wider digital asset sector.
Through XXI Capital, Tether has been seeking exposure to firms that sit at the intersection of bitcoin, energy and financial services. The fresh focus on a possible two-way deal with Elektron Energy indicates that Tether still sees strategic value in pairing capital and energy expertise, even as it steps back from a more complex three-party integration.
XXI Capital is now revising its corporate strategy in light of the changes, with investors watching to see whether it pursues further acquisitions or partnerships in the bitcoin and energy space.
Rising centralised exchange volumes form backdrop
The internal reshuffle and strategic rethink at XXI Capital come against a backdrop of renewed activity on centralised cryptocurrency exchanges (CEXs).
CEX trading volumes rose in June for the first time in five months, with spot market turnover climbing 15.3% to $1.11tn. At the same time, real-world asset (RWA) perpetual futures volumes surged to a record $311bn.
The rebound in trading activity suggests fresh momentum in digital asset markets, a context in which Tether, XXI Capital and Strike are all recalibrating their roles – whether through leadership changes, abandoned mergers or renewed strategic focus on core products.
