Ten31 Timestamp 889,976
A little relief rally on some more benign tariff commentary to start the week was swiftly smacked down 48 hours later, as the Trump administration made it clear the closely-watched “Liberation Day” coming up on April 2 may not be likely to drive the V-shaped recovery many have been awaiting since tariff talk began spooking markets earlier this year. Treasury yields, ostensibly this administration’s core KPI, still haven’t budged much despite growing equity volatility, even as foreign buyers have aggressively retreated from US stocks (presumably to rotate into gold, European equities, and other assets outside the USD nexus). That said, signposts on the margins this week pointed to policymakers increasingly looking for new, creative ways to drive incremental Treasury demand, including changes to banking capital regulations and potentially a pullback from unconditional Fed swap lines to foreign central banks. At the risk of sounding like a broken record, to the extent these trends continue to play out, we see this ongoing fracturing of post-1971 trade and capital markets relationships as a clear boon for politically neutral, non-sovereign assets like gold and bitcoin, a theme the yellow metal has been fervently signaling over the past month.
Portfolio Company Spotlight
Mempool.space is the leading explorer and analytics platform for the bitcoin ecosystem. The platform provides extensive data and tools for real-time analysis of the multi-layer bitcoin network, including granular information on the bitcoin blockchain, the lightning network, and a mining dashboard, all presented in an intuitive and sleek UI. The site allows users to easily estimate forecasted transaction fees, drill into in-depth data on both historical and forecasted blocks, explore the liquidity and connectivity of nodes across the lightning network, and much more. Users can either query data directly through the mempool.space site or choose to self-host an instance of the project on their own hardware to eliminate third-party dependencies. In addition, mempool.space has recently launched a Mining Accelerator product to help users more easily and predictably manage bitcoin’s volatile blockspace fee market.
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. Visit ten31.vc/invest to learn more and get in touch to discuss participating.
Selected Portfolio News
Fold was added to Bitwise’s new OWNB ETF focused on companies building corporate bitcoin treasuries:
Mempool.space’s custom bitcoin treasury dashboard was featured at this week’s Metaplanet shareholder meeting:
OpenSecret (fka Mutiny) added new search functionality to its Maple private AI chat tool:
Media
Fold Founder and CEO Will Reeves joined the Ten31 team on Bitcoin Alpha to discuss the company’s journey to a public listing and the power of bitcoin rewards.
Ten31 Managing Partner Marty Bent appeared on the Coffee and a Mike show with financial commentator Mel Mattison.
Unchained’s Jessy Gilger joined the Investors Podcast to discuss the benefits of bitcoin-native financial advisory services.
OpenSecret CEO Marks discussed building private AI tools on the Opt Out podcast.
Market Updates
President Trump once again did his best Michael Scott impression on tariffs all week, kicking things off with a suggestion that the upcoming April 2 tariff update will be more narrow than expected and unlikely to include sector-specific tariffs.
Meanwhile, after insisting a few weeks ago he “won’t bend at all” on his tariff push, Trump indicated he “may give a lot of countries breaks” and that new tariffs would be “more lenient than reciprocal.”
Equity indices rejoiced on Monday, ripping several percentage points higher on the comments.
However, the rug was swiftly pulled, as Trump later in the week pointed to a laundry list of sector-specific tariffs while announcing a new 25% duty on auto imports.
The inflation backdrop also worsened at just the wrong time, with Core PCE (the Fed’s favored gauge for price inflation) coming in hotter than expected at +2.8% for February. Elsewhere, the University of Michigan’s index for long-term inflation expectations popped to 4.1%, marking the first time in 32 years the number has posted a 4-handle.
The tariff and inflation headlines fully undercut the rally from Monday, as equity indices took a bath on Friday and put in a lower close vs last week.
Despite the volatility, the “scare investors into Treasuries” playbook that some observers believe the administration is running still hasn’t made much progress, with benchmark yields largely flat since the equity selloff began in earnest.
That said, the new administration’s more adversarial stance on trade has reportedly led some European central bank heads to worry they won’t be able to rely on apolitical Federal Reserve swap lines anymore, which may be a new source of incremental demand for larger holdings of US Treasuries as emergency liquidity.
Either way, recent policy moves do seem to have effectively sent the message to foreign buyers to reduce their US exposure, as March has seen the largest net foreign selling of US stocks in two years and one of the largest outflow months on record.
Fundamental data points weren’t much more encouraging than the tariff and inflation headlines, as the latest Manufacturing PMI reading came in below consensus and in contraction territory, though Services PMI was much higher. However, the Philadelphia Federal Reserve Services Index fell dramatically M/M to its lowest reading in ~5 years.
Meanwhile, the latest update to the Atlanta Fed’s GDPNow tracker took another significant step down and now points to a notable GDP contraction in Q1, even adjusted for spiking gold imports.
Even so, Atlanta Fed President Raphael Bostic suggested he now forecasts only one rate cut this year, below the two cuts baked into consensus expectations.
Stephen Miran, head of Trump’s Council of Economic Advisors, reassured the media this week that tariffs won’t drive real short-term economic pain…but that reorienting the economy away from public sector job growth likely will.
The New York Fed estimated this week that nearly 10 million US student loan borrowers are now behind on their payments following the expiration of a Covid-era pause on billing.
BlackRock’s Global Allocation Fund nearly doubled its IBIT holdings Q/Q as of January 31st per a new filing this week.
More generally, spot bitcoin ETFs have quietly put up a solid multi-week streak of net inflows despite choppy price action, bringing in ~$1.1 billion since mid-March with no net outflow days until this past Friday.
Regulatory Update
Treasury Secretary Scott Bessent floated the idea of making the Supplementary Leverage Ratio (SLR) used in the regulation of bank balance sheets more flexible to allow US banks to hold more Treasuries without an incremental capital charge, an idea discussed by industry observers for several years.
A “panel of financial experts” encouraged the Fed to set up a new emergency liquidity facility for the ~$1 trillion of outstanding hedge fund basis trades in US Treasuries, probably just as a precaution and for no particular reason.
South Carolina joined the strategic bitcoin reserve party, as a state Representative introduced legislation that would allow the state’s treasury to allocate up to 10% of some public fund pools to bitcoin. There are currently 36 outstanding state bitcoin reserve bills in the US.
The FDIC announced it will eliminate “reputational risk” – which has historically been used in practice to discourage digital asset banking relationships – as a component in bank supervision. The agency also dropped its rule requiring banks to receive FDIC preapproval before engaging in “crypto”-related activities, potentially clearing more room for custody and collateralized lending by major banks.
Congressman Tom Emmer, House Majority Whip and Vice Chair of the Subcommittee on Digital Assets, commented this week that stablecoins shouldn’t be subject to provisions from what he termed the “so-called Bank Secrecy Act,” arguing that the legislation is no longer appropriate for many modern technologies.
President Trump pardoned the three founders of large cryptocurrency exchange BitMex, who had previously pled guilty to violating elements of the Bank Secrecy Act.
Despite recently removing Tornado Cash-associated addresses from its sanctions list, the US Treasury Department filed a notice this week to block a Texas court judgment in the ongoing Tornado Cash case which would complicate Treasury’s ability to potentially re-sanction Tornado Cash (or similar technologies) in the future.
President Trump endorsed BITCOIN Act sponsor Senator Cynthia Lummis for reelection well ahead of midterms, noting she is working closely with him to “make America the crypto capital of the world.”
Two US Senators introduced a new bipartisan resolution that calls bitcoin a technology that supports democratic values. Another bipartisan Congressional group also re-introduced a bill to more closely regulate illicit activities in cryptocurrencies.
Noteworthy
The Artist Formerly Known as MicroStrategy officially surpassed 500,000 bitcoin in its corporate treasury, with recent purchases partially funded through its new preferred facilities.
After several months of speculation, OG meme stonk GameStop announced its plan to add bitcoin to its corporate treasury, starting with a $1.3 billion convertible note.
Research analysts at Standard Chartered bank published a note positing a “Mag 7B Index” which would swap bitcoin in for Tesla to achieve better volatility-adjusted returns.
Bitcoin Magazine published an editorial on the potential of the FAIR Act to limit civil asset forfeiture of bitcoin holdings, an important consideration as Congress potentially gets closer to expanding the US strategic bitcoin reserve.
Paolo Ardoino, CEO of stablecoin giant Tether, said the company is in talks with a US Big Four auditor as it looks to shore up its US regulatory posture.
World Liberty Fi, the “DeFi” platform linked to the Trump family, and Custodia Bank both announced the launches of their own stablecoins this week.
Travel
MIT Bitcoin Expo, Apr 5-6
Austin Bitdevs, Apr 17
Bitcoin 2025, May 27-29