SoftBank Re-enters Crypto Market: A New Voyage with Twenty One Capital or Another Misstep?

Japanese investment powerhouse SoftBank is jumping back into the world of cryptocurrency by sponsoring Twenty One Capital, a new Bitcoin investment program. Backed in sync with prominent names like Tether, Bitfinex, and Cantor Fitzgerald, SoftBank’s recent venture is seen by many as a positive development and a further proof of increasing institutional adoption of cryptocurrency.

SoftBank – An Asset Under Management Powerhouse

Boasting $308.7 billion in assets under management, the SoftBank Group is more or less operating in the same vein as a Japanese sovereign wealth fund, as told by Jeff Park, Head of Alpha Strategies at Bitwise. In the perspective of many, SoftBank’s budding interest in Bitcoin signals a welcome development and an additional instance of ascending institutional crypto adoption.

A Case of Déjà Vu?

However, for veteran analysts and spectators, SoftBank’s recent move could invoke a sense of déjà vu rather than signifying something revolutionary. It was back in 2019 when SoftBank made the headlines, courtesy of a mammoth loss that its founder, Masayoshi Son suffered on his individual Bitcoin investment. Son found himself amidst the throes of the ICO frenzy in late 2017, entering the cryptocurrency sphere when Bitcoin was sitting pretty at an all-time high of roughly $20,000. If he had stuck to his investment, with Bitcoin currently trading at $93,000, it would have turned out to be highly profitable. Instead, he went for selling it prematurely in early 2018 when Bitcoin was on a downturn, leading to a staggering $130 million loss, as reported by the Wall Street Journal.

Investor Sentiments: Is History Going to Repeat Itself?

The pertinent question in the minds of investors now is whether this scenario will play out differently this time around. To uncover some hint, they may draw a parallel to the recent happenings with Oracle’s stock. The President of the United States, Donald Trump, announced not too long ago that SoftBank is set to be a part of a $100 billion initiative to erect AI infrastructure in the U.S., working hand-in-hand with OpenAI and Oracle. This looked like a fruitful opportunity for the stock of Oracle. But contrary to expectations, Oracle’s stock experienced a 28% downturn after reaching the $188 per-share peak, post-Jan. 22 announcement. This decline can be attributed to various external factors including macroeconomic challenges and geopolitical tension, or could simply be a case of untimely coincidence. One analyst, however, found the connection between SoftBank’s participation in the AI project and Oracle’s stock decline. According to Quinn Thompson, the founder of crypto hedge fund Lekker Capital, as SoftBank becomes involved in an asset you own, it is time to sell. He was referring to the Oracle’s stock setback when he mentioned this.

Conclusion

Riding on the volatility of the cryptocurrency market, especially Bitcoin, can prove both challenging and lucrative. As SoftBank ventures back into the crypto-world, the investors are left wondering: will history repeat itself, or is it a new dawn for profitability in the crypto world for the investment giant? With the mix of institutional interest and market unpredictability, the outcome of SoftBank’s move remains to be seen.