Ten31 Timestamp 904,148

After four years of the Biden administration pushing the limits of Modern Monetary Theory with Build Back Better, the Green New Deal, and Activist Treasury Issuance, the Trump administration and Congressional Republicans said “hold my beer” this week with the passage of Trump’s own jumbo-sized, triple-B spending plan, the Big Beautiful Bill. Precisely what the new budget will do to federal deficits over the next few years is anyone’s guess, but whatever your estimate is, we’ll take the over. President Trump had a simple consolation for those stodgy fiscal conservative dinosaurs hand-wringing about what the bill might do to the US’s already bloated federal debt, noting that we’ll make it all back with “GROWTH, more than ever before,” echoing Treasury Secretary Scott Bessent’s talk track in recent weeks. The Treasury Secretary’s messaging shift has apparently also bled into his views on the federal maturity ladder, as Bessent, who just last year criticized Janet Yellen’s aggressive shift of debt issuance to the short end of the yield curve as an attempt to drive a “sugar high” in the economy, flatly said this week that he has no intentions to term out Treasuries beyond the short-end anytime soon. As Trump continues to publicly attack Fed Chairman Jerome Powell’s decision to maintain benchmark interest rates and the administration teases the announcement of a more, ahem, accommodative Fed Chair, it increasingly looks like the plan is to pretty explicitly and transparently pin yields and let nominal growth rip. Historically, such an environment has been very kind to hard assets without sovereign liability – it might make sense to get some just in case Trump does exactly what he’s telling you he’s going to do.1

Portfolio Company Spotlight

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Selected Portfolio News

OpenSecret’s Maple AI added new capabilities for document and image uploads:

Strike added new early collateral access options for users of its Lending product:

Media

Ten31 Managing Partner Jonathan Kirkwood participated in a panel on the public company bitcoin treasury strategy at this year’s Bitcoin Conference.

Ten31 Managing Partner Marty Bent joined the You’re the Voice podcast to discuss the latest trends in the bitcoin ecosystem.

Primal gave an in-depth presentation on its new Primal Studio tools at the Bitcoin Prague conference.

AnchorWatch Co-Founder Becca Rubenfeld appeared on the What Bitcoin Did podcast for a personal conversation highlighting the grit and tenacity that makes us proud to support her as investors and friends.

Hoseki Founder and CEO Sam Abbassi joined Marty Bent on the TFTC podcast to delve into the FHA’s recently announced policy of accepting bitcoin holdings as part of mortgage underwriting.

Market Updates

After weeks of horse trading and social media tirades, Congress finally passed the One Big Beautiful Bill, a new budget full of aggressive spending plans and tax cuts likely to boost both deficits and – per its advocates – nominal GDP growth, hitting President Trump’s target deadline of July 4th.

Prior to passage of the bill, Trump sent a message to all “cost-cutting Republicans” to not focus too much on the incremental deficits and instead remember that we’ll make it all up ten times over with GROWTH! It remains an open question whether Americans will get tired of all the winning before they get tired of the deficits.

As the US continues to pile up wartime federal deficits, Treasury Secretary Scott Bessent flatly downplayed any potential for an attempt to term out new debt issuance, which has skewed atypically toward the more stimulative short end in recent years, given where rates for longer maturities are currently sitting.

President Trump clearly remains well aware of the headwind imposed by these rates, as he once again publicly attacked Fed Chairman Jerome Powell, this time with an all-caps, hand-written note lambasting Powell for “costing the USA a fortune” and exhorting the central bank to move its benchmark rate toward the 1-2% level.

Powell, for his part, said this week that the Fed would have cut rates by now if not for the uncertainty created by President Trump’s tariff plan.

Despite recent reports that the Trump administration is planning to announce its Fed Chair nomination almost a year early, Secretary Bessent suggested on CNBC this week that the decision likely won’t be made till this fall. However, he notably did not take the opportunity to say he’s not a leading candidate for the job – whether that happens or not, it’s a noteworthy signpost in a world where the Treasury and Fed are likely about to work together much more closely.

The US announced a trade deal with Vietnam this week, the first such deal headline in over a month. The agreement will include a 20% base tariff and a 40% “transshipment” tariff on goods originating from China, lower than rates floated in the spring but still substantially higher than the prior regime.

Elsewhere on the trade front, ahead of the July 9th expiration of the 90-day pause on sweeping new global tariffs, Trump suggested the US will send letters to “10 or 12” countries on Monday indicating where their tariff rates will land.

Stateside, ADP hiring numbers for June missed consensus estimates by a wide margin, though the more closely watched Non-Farm Payrolls number handily beat consensus.

Amid all the seismic shifts in both international and domestic policy, the DXY Index – which measures dollar strength relative to a basket of important international currencies – officially clocked in its worst first half performance since 1973. While some of that sharp decline is just a reversal of the huge DXY spike from late last year, the level is notably back to where it was in the spring of 2022 right as the Fed was ramping up rate hikes.

Amid relative price choppiness in the low $100,000 range, bitcoin ETFs have been on a quiet inflow heater for the last month, notching a 15-day inflow streak that was only broken by one small outflow day this week.

Since early June, the complex has taken in nearly $5.5 billion, and BlackRock is reportedly now making more fees from IBIT than the firm’s flagship S&P 500 ETF.

Prominent RIA founder Ric Edelman – whose RIA claims nearly $300 billion in AUM – suggested this week that clients should have at least 10% and as much as 40% of their portfolios in “crypto”. While we sincerely hope Mr. Edelman’s recommended crypto allocation doesn’t look like this, we see this as an early but clear signpost of acceptance of bitcoin among traditional wealth management platforms.

Bitcoin’s “illiquid supply,” i.e. bitcoin held by entities that prominent blockchain analytics firm Glassnode believes have low propensity to sell, surpassed 14 million, close to an all-time high.

Regulatory Update

Provisions for a de minimis capital gains tax exclusion for bitcoin transactions and several other pro-bitcoin policies were included in near-final drafts of the Big Beautiful Bill, but were dropped at the last minute from the final version.

However, Senator Cynthia Lummis shortly thereafter introduced a separate, independent bill including all those provisions.

The US House Financial Services Committee announced “crypto week” starting July 14th, during which the committee will focus on pushing forward a slate of digital asset legislation including the GENIUS Act and the CLARITY Act.

Connecticut’s governor chose to HFSP this week, signing into law a bill to prohibit the state from investing in bitcoin. The law also requires businesses interacting with bitcoin in the state to make new disclosures to customers.

Noteworthy

Figma, a prominent design software company and a darling of private markets previously valued at $20 billion in an aborted Adobe acquisition, revealed in its S-1 IPO filing that it holds ~$70 million of bitcoin ETFs on its balance sheet, good for ~5% of the company’s total cash reserves. The filing also noted the company has authorization for up to $30 million in additional purchases.

The latest annual economic report from the Bank of International Settlements focused on unsustainable government debt levels around the world, noting the increased vulnerability and fragility of a system whose marginal buyers are increasingly leveraged hedge funds.

Cygnal polling group released a new report on the growing influence of bitcoin holders as a voting bloc.

Over 16 billion (billion with a b) passwords were compromised last week in the largest data breach ever, reportedly affecting users of Apple, Facebook, and Google services. The leak is just the latest example of the vulnerabilities of centralized repositories of sensitive user data and the benefit of tools for locally hosted personal data.

Travel

• Nashville Bitdevs, July 8
• Austin Bitdevs, July 17

1 In case it wasn’t clear, the snarky bullposting in this newsletter is not financial advice. Please consult with your financial and tax advisors before adding the best performing asset of all time to your portfolio.