Twenty One Capital (XXI) reported $1.087 billion in net income for the third quarter, and CEO Rapha Zagury told shareholders on Friday that nearly all of it came from a $1.093 billion rise in the accounting value of the bitcoin the company holds, not from cash its operations produced.
“A balance sheet is not a business,” Zagury wrote in the quarterly letter, calling the company’s coins “our starting point.” He added that “gains from an asset we own are not the same as earnings from businesses we operate.”
The company ended September with 43,514 BTC, valued at about $83,700 apiece, and $102.8 million in cash, the letter said. It also owed $486.5 million in principal on convertible notes, debt that can be converted into company stock, backed by roughly 16,116 BTC. By Unchained’s count, that puts about 37% of the treasury up as collateral.
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What the 10-Q Adds
The company’s quarterly report to the SEC 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, by Unchained’s math, about $1.27 billion in losses over the first six months.
The filing also states the company has no binding agreement to buy Elektron, the bitcoin miner Zagury founded. It confirms Twenty One is no longer pursuing Strike, the bitcoin financial services firm founded by former Twenty One CEO Jack Mallers, a split that was already public: Strike pulled out of the deal in July when Mallers stepped down as CEO. Both deals were part of a three-way merger that Tether, which holds a stake in Twenty One, proposed in April.
Vested options on 1,522,407 shares held by Mallers, exercisable at $14.43 each, expired unexercised on Oct. 18 at the end of a 90-day window after his July 20 departure, the 10-Q shows.
What Zagury Says Comes Next
Zagury wrote that Twenty One is evaluating deals in 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 the shares trade below the value of the assets behind them.
He also said David Goldschmidt, the former head of Skadden’s global capital markets practice, has joined the board and its audit committee. Zagury said he will keep writing to shareholders every quarter.
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