Ten31 Timestamp 876,769
The path of the Fed’s benchmark interest rate and rates in the real economy continued to diverge this week, as the 10-year US Treasury broke the 4.6% level for the first time since the spring and is now nearing YTD highs, while the average 30-year fixed mortgage rate also continued to climb back toward its recent peak. Both key rates have now risen nearly 100bps since the Fed began cutting by the same amount, a decidedly awkward development for the US’s fiscal position as federal deficits continue to come in at GDP-adjusted levels not typically seen outside of recessions and wartime (potentially forcing progressively more debt issuance toward the front end of the curve). Meanwhile, more pieces on the global chess board continued to move into place for bitcoin, including some positive regulatory signposts and new vehicles to support the growth of the corporate bitcoin treasury strategy.
As the year comes to a close and we reflect on another year with bitcoin up well over 100%, Ten31 wishes every bitcoiner and pre-coiner a happy holiday season and strong start to 2025. We look forward to reporting on and pushing forward what looks set up to be the most bullish and transformative year in bitcoin’s history.
Portfolio Company Spotlight
Fold is a leading financial services platform providing the most comprehensive bitcoin-denominated consumer rewards programs and a suite of services bridging bitcoin and traditional financial rails. Fold offers debit cards that accrue cash-back rewards in bitcoin that can be withdrawn to customer-controlled wallets, on top of unified checking and bitcoin custody accounts allowing users to seamlessly combine their USD and bitcoin activities to better preserve and grow their wealth. Fold has an exciting product pipeline and is set to achieve a public listing in the near-term with over 1,000 bitcoin on its balance sheet, giving the company one of the largest corporate bitcoin treasuries in the world.
As the world’s largest investor focused entirely on bitcoin, Ten31 has deployed nearly $150 million across two funds into more than 30 of the most promising and innovative companies in the ecosystem, and we expect 2025 to be the best year yet for both bitcoin and our portfolio. Ten31 will hold a first close for its third fund at the end of this year, and investors in that close will benefit from attractive incentives and a strong initial portfolio. Visit ten31.vc/funds to learn more and get in touch to discuss participating.
Selected Portfolio News
Fold filed the latest amendment to its S-4 as the company continues to move closer to its public listing:
Media
Ten31 Advisor and Zaprite Head of Business Development Parker Lewis joined the What Bitcoin Did podcast to discuss the potential for a strategic bitcoin reserve and bitcoin’s long-term role as a reserve asset.
StatMuse published its latest monthly Muse Letter.
Market Updates
The US 10-year Treasury yield broke the 4.6% level this week and is now approaching YTD highs to close out the year. The benchmark rate is now up ~100bps since the Fed began easing its policy rate in September.
On the back of that increase, mortgage rates took a step back up, with the average 30-year fixed rate nearing 7%, further exacerbating the historically unaffordable US housing market.
Overseas, the Japanese Yen saw continued pressure this week and is now again approaching YTD lows. Japan’s Finance Minister reiterated that the country is ready to act once again to stabilize the currency against “excessive moves,” which could have implications for the near-term path of key yields given Japan’s $1 trillion+ stockpile of US Treasuries.
Elsewhere, new reports suggested China is weighing a record bond issuance of over $400 billion to support its plans for increased stimulus spending early next year.
Asset manager Bitwise, which manages the BITB spot bitcoin ETF, filed for a new ETF seeking to provide broad exposure to companies that have adopted a bitcoin treasury strategy (specifically those that have accrued more than 1,000 bitcoin on their balance sheets).
Similarly, Strive Asset Management – which was founded by Vivek Ramaswamy, a close ally of President-elect Trump, and which received a recent investment from incoming Vice President JD Vance – filed for an ETF offering exposure to bitcoin-backed bond issuances, with a primary initial focus on MSTR convertible bonds.
Meanwhile, though bitcoin ETFs had a mixed week of net inflows, BlackRock continued to significantly grow its allocation to IBIT in its Global Allocation Fund.
Regulatory Update
The Bitcoin Policy Institute published a new report intended for incoming US Treasury Secretary Scott Bessent surveying bitcoin’s potential as a tool for US statecraft.
In his latest pro-bitcoin appointment, President-elect Donald Trump nominated Stephen Miran to head the Council of Economic Advisors. Miran has recently spoken favorably about less burdensome regulation of the bitcoin and “crypto” ecosystems.
Russia imposed a six year ban on new bitcoin mining developments in ten regions around the country amid power shortages in some areas. However, a Russian Finance Minister also indicated the country has been using bitcoin to settle some international trade and that they are likely to expand this use of bitcoin next year.
The IRS finalized a new rule classifying almost all services that facilitate cryptocurrency transactions — including non-custodial services that never control funds but excluding “validation services” — as “brokers,” which would require those services to report detailed information on users through Form 1099. The rule is currently set to take effect in 2027.
A US appeals court overturned the recent injunction that forestalled the implementation of the Corporate Transparency Act, setting a January 13th deadline for over 30 million small businesses to provide new personal information to FinCEN.
Noteworthy
Prominent stablecoin issuer Tether – which holds over 82,000 bitcoin – announced a $775 million strategic investment in alternative media platform Rumble, which also recently launched its own bitcoin treasury strategy.
MicroStrategy announced an upcoming vote to expand its total authorized shares to more than 10 billion (vs ~330 million authorized and ~280 million outstanding today) to better accommodate its ongoing aggressive bitcoin accumulation strategy.
Elsewhere, MicroStrategy Founder Michael Saylor published a proposed regulatory framework for the treatment of “digital assets” including bitcoin, stablecoins, non-bitcoin cryptocurrencies.
Travel
Austin BitDevs, Jan 16
Nashville BitDevs, Jan 28