Ten31 Timestamp 894,061

The escalating battle of the world’s aspiring Great Men of History continued to look more like a high school cafeteria this week, as leaders around the world increasingly seemed to be indicating their exclusive loyalty to one of the two main cool kids’ tables. On the American side of the lunchroom, the Trump administration seemed to give hints of potential de-escalation, while strategically (or just randomly, depending on your priors) backtracking and suggesting a deal is still far off. Not to be outdone, the Chinese side insisted they have not even initiated talks with the US and won’t entertain negotiations until Trump cools off his rhetoric. Both factions appear to be winning over some supporters and alienating others as global trade looks more and more likely to fracture along newly drawn political fault lines. However it plays out and whatever the 4D chess tactics Trump and Xi may be employing, real economic data points in both countries appear to be heading south precipitously, which likely amplifies pressure for a deal on both sides while potentially pulling forward a new wave of global liquidity to offset the pain (something China already appears to be explicitly signaling). The opaque bureaucratic machinations of the past few weeks just heighten our appreciation for the simplicity of bitcoin’s transparent, globally accessible, credibly neutral ruleset, and it increasingly appears investors and pundits across different financial markets may be gaining appreciation for that as well.

Portfolio Company Spotlight

Strike is an emerging fintech and payments innovator leveraging bitcoin and the lightning network to allow consumers and merchants around the world to accumulate bitcoin while sending and receiving payments instantly and cheaply in a wide variety of settings. Strike's offerings include a consumer app – now available in nearly 100 countries including the EU – for bitcoin purchases, P2P payments, global remittances, and more. Strike also offers a suite of APIs for merchants and enterprises to easily benefit from lightning’s low cost, near-instant settlement. The company has announced a variety of exciting new features over the past year and continues to have one of the most robust pipelines of upcoming launches in the bitcoin ecosystem.

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.xyz/invest to learn more and get in touch to discuss participating.

Selected Portfolio News

Strike shared selected financials publicly for the first time, highlighting the platform’s strong volumes and impressive profitability:

Strike Founder and CEO Jack Mallers also announced he will serve as CEO of Twenty One – a new bitcoin treasury company supported by Tether, SoftBank, and Cantor Fitzgerald – while continuing to lead Strike:

Media

Ten31 Managing Partner Matt Odell appeared on the What Bitcoin Did podcast to discuss bitcoin’s progress toward becoming a global reserve asset.

Matt also joined Fold CEO Will Reeves on the Bitcoin Brainstorm show with ARK.

Managing Partner Marty Bent joined the Tom Woods show to discuss bitcoin’s differentiation from the rest of the “crypto” universe.

Unchained also published a video series on this point, with discussions led by bitcoin veterans Parker Lewis and Dhruv Bansal.

Market Updates

The trade tit-for-tat continued in earnest this week, as the Chinese Ministry of Commerce announced it would retaliate against any countries joining an anti-China trade bloc in the midst of US discussions with key trade partners.

In response, Japan’s Prime Minister indicated the country will not make blanket concessions to US trade demands, and Japanese sources suggested the country will look to resist moves that would isolate China.

Meanwhile, China has ramped up overtures to the European Union, and the EU is reportedly close to lifting tariffs on key goods and sanctions on Chinese officials.

Back in the Western nexus, Treasury Secretary Scott Bessent suggested India will be the first to sign a new trade deal with the US in the wake of JD Vance’s trip to the country this week. Bessent also indicated talks are moving “faster than expected” with South Korea.

Perhaps coincidentally (or perhaps not), India announced new steel tariffs on China this week, while South Korea initiated new anti-dumping tariffs against certain Chinese and Vietnamese goods.

On a similar theme, Thailand’s former Prime Minister also suggested the country’s current trade dynamic with China is not sustainable and may need to be restructured via a deal with the US.

US rhetoric regarding China oscillated as much as ever this week, with markets getting excited early on by a closed-door meeting in which Secretary Bessent reportedly said he expects a de-escalation in the “very near future.” President Trump also suggested he doesn’t want to “play hardball” with China and that final tariffs won’t remain at current levels.

However, the tone seemed to reverse course later in the week, as Bessent subsequently insisted the US has not made and will not make any unilateral de-escalation offers and that a resolution with China could take as long as 2-3 years.

Bessent also gave a noteworthy, publicly televised speech in the middle of the week suggesting there’s a deal to be made with China, but that it will require a comprehensive plan to “restore balance to the global economy” across many facets of global trade.

Throughout the week, President Trump suggested talks with China on such a deal were ongoing, but China consistently responded that they have not participated in any discussion with the US and don’t plan to until the US makes the first move to lower tariffs.

That said, some reports indicate that China is quietly weighing tariff exemptions for some US goods.

For all the bluster, both camps are starting to see fissures in their real economies, as Chinese manufacturing output has declined precipitously on the back of mass order cancellations from the US. In response, China publicly affirmed its readiness to ramp up stimulus spending for industries affected by trade disruptions.

US businesses are also bracing for the worst, as CEOs of several key big-box retail chains met with President Trump this week to send the message that shelves will soon be empty if the current tariff regime persists.

That tone is rippling through other business lines as well, as multiple forward-looking business surveys took a nosedive in their latest readings.

US freight and shipping volumes have continued to crater, and trucking firms like SAIA are beginning to turn in dismal quarters and near-term outlooks.

In line with all these data points, private equity and credit giant Apollo raised their odds of recession to 90% if the current policy path is maintained.

Federal Reserve Governor Beth Hammack suggested the Fed is still on a path for more balance sheet reduction and that the central bank has a “high bar” for stimulative intervention, a statement that runs somewhat counter to Susan Collins’s talk track just two weeks ago. Based on the events of the past couple years, we’d estimate the Fed’s bar is somewhere around a regional bank failure or a 4.5% 10-year handle.

To that point, bond yields have stabilized substantially in the past couple weeks, with the 10-year down ~25bps from its high watermark earlier this month on the biggest 4-week net inflow into Treasuries in two years.

After publicly lambasting Fed Chairman Jerome Powell several times last week, Trump ramped up this rhetoric on Monday, calling Powell a “major loser” and challenging him to a fight in the parking lot after school. However, he shortly thereafter said he’s never had any plans to fire the Fed chief.

After minimal progress reducing the federal deficit, Elon Musk announced that he’ll be significantly scaling back his role at DOGE next month. With defense spending set to rip and Trump’s new tax bill making progress in Congress, we think we have a good idea which way the deficit will trend from here.

Bitcoin reclaimed the $95,000 level this week as bitcoin ETFs shifted strongly back into inflow territory, pulling in more than $3 billion of net inflows over the past five days.

The mainstream financial press have increasingly taken note of bitcoin’s recently declining correlation to US tech stocks, with both Bloomberg and CNBC running segments on this point. Bloomberg also ran a piece highlighting growing corporate interest in bitcoin as a treasury asset as it becomes more mature and resilient.

Regulatory Update

The Federal Reserve withdrew its prior guidance on US banks’ involvement with digital assets, potentially helping to clear the way for banks to more easily custody bitcoin. However, Senator Cynthia Lummis cautioned that this shift is more “lip service” than substantial change.

Around the same time, new reports suggested Circle, BitGo, Coinbase, and other large “crypto” firms are all planning to apply for banking charters.

The SEC announced it will launch a “cross-border crypto sandbox” for experimental new regulatory frameworks with El Salvador.

Florida’s state legislature is set to vote on a new bill that would ban disappearing messages and require backdoors on social media platforms, ostensibly in the name of protecting teenage users.

Noteworthy

A new research report from Jefferies indicates that China and Russia are encouraging more bitcoin mining domestically.

Meanwhile, Russia announced it will open a bitcoin exchange for qualified, very wealthy investors.

The CEO of asset management giant Charles Schwab said the firm will launch direct spot trading of bitcoin and other cryptocurrencies within the next 12 months.

Travel

• Bitcoin 2025, May 27-29

• Bitcoin Policy Summit, June 25-26