Ten31 Timestamp 901,215
Another week, another set of generational geopolitical headlines. After many months of brinksmanship and will they / won’t they, the American and Chinese trade policy consortia seemed to make headway this week, with President Trump suggesting a deal on key issues like rare earth materials has been finalized and Commerce Secretary Howard Lutnick suggesting Chinese tariff rates won’t move further from here. (Stay tuned for next week’s total reversal and return to the drawing board by both sides.) Trade talks took a backseat mid-week to escalating tensions in the Middle East, as Israel launched a preemptive strike on Iran after weeks of speculation, driving both oil prices and Treasury yields higher. While the potential for increased energy prices naturally puts some upward pressure on fixed income yields, we still find it noteworthy that the world’s ostensible bedrock safe haven asset would sell off on reports of increasing global conflict, particularly with the US on pace to post a $2 trillion fiscal deficit for the first time in history and in need of lower rates to manage its ballooning interest burden. While bitcoin saw its typical kneejerk downdraft on the Israel-Iran news, we think the magic internet money holding in at $105,000+ in the midst of all these headlines shows underappreciated strength, particularly as ETF flows continue to ramp to new highs.
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Selected Portfolio News
OpenSecret added DeepSeek’s reasoning model to its private Maple AI chat platform:
Media
AnchorWatch Co-Founder and COO Becca Rubenfeld was featured in a Fox Business interview highlighting the value of robust bitcoin custody and insurance solutions.
Strike Founder and CEO Jack Mallers appeared on a CoinTelegraph interview to discuss the latest in bitcoin and bitcoin treasury companies.
Vida Co-Founder and CEO Lyle Pratt published an article in Forbes on recent trends in SMB adoption of AI tools like Vida’s suite of products.
Market Updates
US and Chinese trade representatives met in London again this week and came away with agreements on a few key issues, including China continuing to supply rare earth materials to the US.
Around the same time, President Trump took to Truth Social to declare the “deal is done” with China following a direct call with President Xi Jinping. Trump’s message included a reference to a final Chinese tariff rate of 55%, which is lower than the 150%+ tariffs Trump had threatened last month, though still likely much higher than the market’s pre-Liberation Day baseline.
Commerce Secretary Howard Lutnick attempted to assure investors that the tariff rates won’t change further from here, though we wouldn’t be surprised if that’s small comfort to many following the last two months.
Following completion of the trade talks, Treasury Secretary Scott Bessent indicated he’d like to see the US’s deficit to GDP “under 4%,” a notable drift upward from the 3% target he was discussing just a few months ago.
But even getting to the 4% level near-term may be increasingly difficult (without some creative choices by the Fed) given where numbers shook out for the month of May – YTD, the US’s deficit is up 14% and on pace for the first $2 trillion+ annual shortfall in history.
Interestingly, federal interest declined decently M/M in May, which may help soften some of the growing debt burden, assuming short-end rates don’t follow long-end rates higher (this has generally not been a strong assumption for economies following an emerging markets playbook of funding aggressively on the short end).
In response to some of these dynamics, the Treasury appears to be ramping up its buyback program, something Bessent has discussed a handful of times this year. The department has conducted consecutive $10 billion buybacks each of the past two weeks, the largest such transactions in the program’s history.
The latest CPI figures came in better than expected, with the metric up only 0.1% M/M and 2.4% Y/Y for May. President Trump used the occasion to – you guessed it – publicly berate Fed Chairman Jerome Powell for a one-point rate cut, noting that he “may have to force something” on the “numbskull” in the Eccles Building if rates don’t come down soon.
Late in the week, the market turned all its attention toward escalating tensions in the Middle East, where Israel launched a strike intended to curb Iran’s nuclear program, immediately spiking oil prices to multi-month highs. Notably, yields on US Treasuries, historically the world’s key safe haven asset, rose on news of the attack.
Despite ongoing fear and uncertainty around tariffs and global unrest, the latest University of Michigan consumer sentiment reading bounced back substantially this month.
Overseas, the Bank of Japan reiterated it stands ready to continue raising benchmark interest rates, though also somewhat bizarrely noted that consumer price inflation remains below its 2% target, even though reported Japanese inflation seems to have been above that level for several years.
The Financial Times ran a piece this week highlighting growing unease among foreign central banks about the ongoing availability of emergency dollar swap lines from the Fed, a message we seem to be hearing with increasing frequency in recent months.
Amid all the uncertainty, bitcoin ETFs continued their unprecedented heater, with IBIT becoming far and away the fastest ETF to clear the $70 billion AUM threshold, hitting the mark in just 341 trading days.
Some of this strength has naturally come from bitcoin’s price appreciation, but flows have also been very strong recently, with the ETF complex picking up nearly $1.5 billion in net new inflows over the past week.
Regulatory Update
US Congressman Tim Burchett introduced a new bill that would fully codify President Trump’s strategic bitcoin reserve executive order into federal law.
The White House’s lead digital assets advisor Bo Hines suggested more details on the design of Trump’s strategic bitcoin reserve are coming “in short order” and ahead of the July 22 deadline for a report from the SBR working group. Hines also said bitcoin holders will be “extremely pleased.”
On the opposite end of the spectrum, Connecticut became the first US state to explicitly ban state investment in bitcoin. We admit it’s a bold strategy, let’s see if it pays off for them.
Encouragingly, new language was added to Congress’s CLARITY Act – which addresses digital assets “market structure” in the US – that would explicitly protect non-custodial software and developers from being considered “money transmitters” under the Bank Secrecy Act.
Newly confirmed SEC Chairman Paul Atkins made comments this week endorsing the right to self-custody bitcoin in the US.
Noteworthy
Several dozen prominent bitcoin developers, founders, and technical voices published an open letter to the bitcoin community advocating for focus on two new OP codes (OP_CTV and OP_CSFS) as bitcoin’s next soft fork upgrade. Interested readers should dig into the potential benefits and tradeoffs of the proposal in this discussion on the Bitcoin Dev Mailing List.
Circle, issuer of the USDC stablecoin (a distant second in market cap to Tether), made its public markets debut with extremely strong post-IPO performance, closing the week with a market cap north of $30 billion.
Ten31 Managing Partner Marty Bent launched Opportunity Cost, an open source browser extension that shows bitcoin prices side by side with USD prices across the internet to highlight the bitcoin opportunity cost of any purchase (for those with a strong stomach, we note this is a particularly powerful / shocking tool to use on Zillow).
Travel
Austin BitDevs, June 19
Bitcoin Policy Summit, Washington DC, June 25-26