Official FO

Byron Gilliam

Bill Gross, the “Bond King” and co-founder of PIMCO, was one of the main characters in finance for nearly two decades.&nbsp;



He was also quite the character.&nbsp;



Gross, who oversaw $1.9 trillion in assets under management at PIMCO’s peak, wrote a <a href="https://williamhgross.com/investment-outlook-archive/">monthly investment letter</a> that touched on topics as diverse as his disdain for self-flushing toilets, how his cat liked to watch him on CNBC, the “half-erotic” pleasure of sneezing, how his youngest son was conceived, how his oldest son was a disappointment, and how he once gave a waitress a “negative tip” for poor service.



The letters often got philosophical, too: “Sand forms the foundation of my being,” he wrote in 2014, “and its porosity is at once my greatest strength and deepest wound.”



He liked to reason by analogy: Bond investors were “vampires of the investment world,” central bankers were monkeys throwing darts, financial markets were “hooked on a morphine drip,” credit markets were a supernova beginning to suffer from entropy.



His investing style was similarly unorthodox: He pioneered the “total return” investing strategy in bond markets, actively trading for capital gains instead of just passively collecting yield.



In short, he was the Warren Buffett of bonds, but quirkier.



In the 1990s, Gross’ monthly musings became a must-read in finance circles, where his quirky metaphors were widely shared and his macro trades were widely copied.



The quirkiness added to his mystique as an investing savant — Gross was not just the Bond King, but something of a philosopher king, too.



That attention helped make him the first bond investor that anyone outside of finance had ever heard of.



It also helped that he really was good at bond investing: In his 27 years at PIMCO, Gross <a href="https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3345604">achieved</a> an annual return of 7.52% a year, well in excess of the benchmark index at 6.44%.



Both institutional and retail investors started to take notice in the early 1990s, pouring billions into PIMCO’s flagship Total Return Fund.



Retail investors also rushed into the closed-end funds that Gross managed, causing the funds to trade at unprecedented premiums above their net asset value (NAV).



This was odd behavior: The PIMCO Total Return Fund was open-ended, so anyone could invest with Bill Gross exactly at NAV.



But retail investors were drawn to the closed-end funds because they seemed to promise more scope for Gross to outperform markets (by using leverage and more aggressive strategies).



Unfortunately, they paid prices that no feasible amount of outperformance could possibly justify.



The PIMCO High Income Fund (PHK), for example, traded 72% above NAV in 2011.



Even for a Bond King, that was a bar too high: 10 years later, the fund’s NAV was up a respectable 63%, but the price of the fund was up only 19% (both in terms of total return).&nbsp;



The difference was that the 72% premium to NAV that investors insisted on paying had slowly eroded to 0%.



Investors who thought they were betting on Bill Gross to outperform learned they were also betting on him maintaining his aura of investing invincibility.



That is hard, if not impossible, to do over an extended period of time.&nbsp;



Even Berkshire Hathaway, still run by the Oracle of Omaha, has long traded at a discount to the <a href="https://static.fmgsuite.com/media/documents/05891b95-b1aa-426b-af7e-525b971905f7.pdf">intrinsic value</a> of the assets it owns.



Could crypto markets prove different?



Investors in the mushrooming number of crypto treasury companies seem to think their respective Oracles and Crypto Kings will do better.



The companies themselves would argue that investors are betting on their unique ability to accumulate crypto faster than investors can on their own.



But there’s nothing unique about their strategies: They all do that primarily by selling shares at a multiple of their NAV (or mNAV, for short).



The example of Bill Gross suggests that mNAV is a function of investors’ belief in a person, and I don’t think it’s any different in crypto.



How else, for example, should investors differentiate between the bitcoin treasury companies BSTR Holdings and Twenty One Capital?



Both were created by merging with a SPAC, both of which were sponsored by Cantor Fitzgerald.



The press releases announcing their formations are effectively interchangeable, with both companies stressing their mission “to maximize bitcoin per share,” which they both acknowledge copying from MicroStrategy.



The primary way to do that is to sell shares at a high, perhaps irrational multiple of NAV — and the only way to do that is with a charismatic frontman who can inspire investors to pay it.



The premiums to NAV that BSTR Holdings and Twenty One Capital command will be a measure of investors’ belief in Adam Back and Jack Mallers.



It might be a little different for treasury companies holding Solana and Ethereum, where executives can promise to maximize the native yield that those assets offer.



The latest Ethereum treasury company, for example, claims to be differentiated by the skill of its executive team.



Announcing the launch of Ether Machine yesterday, co-founder Andrew Keys emphasized the company’s ability to maximize yield: &#8220;We have assembled a team of &#8216;Ethereum Avengers&#8217; to actively manage and unlock yields to levels we believe will be market-leading for investors.&#8221;&nbsp;



I have no doubt that these impressively credentialed executives are all Tony Stark-level geniuses.&nbsp;



But how much extra yield can even superheroes squeeze out of Ethereum?&nbsp;



Will it be enough to cover the salaries of a chai, CEO, vice chair, CTO, CFO and head of DeFi and still leave something for shareholders?&nbsp;



Bill Gross, the greatest bond investor of all time, heroically outperformed the index by one percentage point per year.



But that was nowhere near enough to justify that 1.7x multiple of NAV that his retail investor acolytes insisted on paying for his closed-end funds.



I imagine he’d be skeptical of crypto treasury companies doing much better.



“Picture perfection or fairy tale endings,” he wrote in 2014, “do not describe the global economy or even its financial markets.”



With crypto treasury companies, investors seem to be betting on a picture-perfect, fairy tale ending.



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The Breakdown Newsletter

Can belief be a business model?

Jeff Albus

This is a segment from the Lightspeed newsletter. To read full editions, <a href="https://blockworks.co/newsletter/lightspeed" target="_blank" rel="noreferrer noopener">subscribe</a>.



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DeFi Development Corp is now just one token shy of a million Solana.



The Florida-based firm <a href="https://x.com/defidevcorp/status/1947266409421234461">announced</a> on Monday that it acquired 141,383 SOL between July 14-20 at an average price of $133.53, <a href="https://x.com/0xGumshoe/status/1947700641729810929">bringing</a> its treasury to 999,999 SOL and equivalents.



The value of those holdings <a href="https://blockworks.co/price/sol">sits</a> just north of $200 million at the time of publication.



The haul <a href="https://x.com/defidevcorp/status/1947266422218088688">included</a> spot purchases, discounted locked tokens, as well as 867 SOL earned through staking, validator operations, and other onchain activity.



It staked all newly acquired SOL immediately, <a href="https://x.com/defidevcorp/status/1947266453415313770">the company said</a>, which earns revenue by running its own validator infrastructure that accepts third-party delegation.



The model is part of a new class of public-market strategies focused on treasury compounding. The idea is that more volatility equals more opportunity to issue shares, buy tokens and boost per-share value.



So far, it&#8217;s a strategy that <a href="https://x.com/defidevcorp/status/1946199391670276104">appears</a> to be working.



DeFi Dev Corp has issued 740,000 shares this month, raising $19.2 million, with the majority of the proceeds allocated to SOL. Another $5 million in dry powder remains available, enough to purchase roughly 24,000 more tokens at current prices.&nbsp;



The firm&#8217;s SOL-per-share metric <a href="https://x.com/defidevcorp/status/1947266440673010025">increased</a> 13% last week to 0.0514, equivalent to $10.39 in SOL value per share. Whether that number continues to rise depends not just on SOL&#8217;s price action, but on DeFi Dev Corp&#8217;s ability to keep stacking without spooking equity markets.



Meanwhile, Upexi, another aggressive entrant in the Solana treasury race, <a href="https://x.com/cryptodotnews/status/1947359003735966175">announced</a> it <a href="https://x.com/UpexiTreasury/status/1947273485404770495">purchased</a> an additional 100,000 SOL for $17.7 million on July 17. That brings Upexi&#8217;s total holdings to 1,818,809 SOL, <a href="https://x.com/UpexiAllan/status/1947279656559731099">valued</a> at approximately $367 million — making it the largest SOL-holding public company to date.



Over half of these tokens were reportedly acquired at a discount in locked form, helping secure an unrealized gain of around $94.7 million over the last quarter.



Teams like this represent a rising breed of publicly-traded treasury builders who seem less interested in diversification than in weaponizing volatility to grow <a href="https://blockworks.co/news/2025-h1-bitcoin-treasury-altcoins">crypto-denominated reserves </a>and per-share value at scale.



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corporate reserves

Equity-fueled firms weaponize volatility to amass SOL

Casey Wagner

This is a segment from the Forward Guidance newsletter. To read full editions, <a href="https://blockworks.co/newsletter/forwardguidance" target="_blank" rel="noreferrer noopener">subscribe</a>.



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The Aug. 1 tariff deadline is quickly approaching, but automakers have already started to report they’re feeling the impact of higher levies.&nbsp;



To recap the current state of auto tariffs: Foreign-made vehicles and car parts were hit with a <a href="https://blockworks.co/news/market-reactions-to-trump-tariff-plans">25% levy</a> on Liberation Day. Then, earlier this month, President Trump slapped a <a href="https://blockworks.co/news/tariff-reversal-sends-stocks-higher">50% tariff </a>(for most countries) on steel and aluminum.&nbsp;



On Aug. 1, the tariff on foreign cars will increase to 30%.&nbsp;



The status of negotiations with the European Union is a bit unclear. White House Press Secretary Karoline Leavitt said last week that the EU is “very eager” to pen a deal. She added that Trump is not open to moving back the Aug. 1 deadline. The comments come after the White House has continued to issue a series of delays and postponements when it comes to new trade policies.&nbsp;



Okay, back to the impact current levies are having on automakers.&nbsp;



Stellantis said on Monday that tariffs will contribute to an expected $2.7 billion loss. Direct tariff payments and loss on planned production resulted in an almost $350 million loss during the first six months of 2025.&nbsp;



Stellantis — the parent company of Jeep, Chrysler and Fiat, among others — suspended financial guidance on April 30 in the wake of tariff announcements.&nbsp;



The automaker giant’s announcement came via a preliminary and unaudited <a href="https://www.stellantis.com/en/news/press-releases/2025/july/stellantis-publishes-preliminary-and-unaudited-key-figures-for-first-half-2025">H1 preview report</a>. Stellantis said it released the figures because analysts’ consensus forecasts and actual performance for the first six months of the year were so different.&nbsp;



Stellantis’s final H1 report will be released next week.&nbsp;



On the domestic front, General Motors this morning reported better-than-expected Q2 earnings, but added that tariffs had a $1.1 billion impact on Q2. This was in-line with expectations executives released earlier this year and the team still expects tariffs will cost the company $4 billion to $5 billion in 2025.&nbsp;



GM said it’s hoping to mitigate at least 30% of its expected cost increases through manufacturing adjustments and other initiatives. Execs on Tuesday’s call said they were optimistic about this plan.&nbsp;



We’ll be watching to see if a trade deal emerges, or if we’ll see another round of TACO-ing. (The acronym, which stands for “Trump always chickens out,” went mildly viral after the president once again walked back various trade policies throughout the spring.)



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Donald Trump

Automakers report feeling impact from tariffs

Macauley Peterson

This is a segment from the 0xResearch newsletter. To read full editions, <a href="https://blockworks.co/newsletter/0xresearch" target="_blank" rel="noreferrer noopener">subscribe</a>.



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Poseidon has raised a $15 million seed round led by a16z crypto to solve one of AI’s bottlenecks: access to high-quality, IP-cleared training data. Incubated by <a href="https://blockworks.co/news/story-protocol-intellectual-property-token">Story Protocol</a>, Poseidon offers a full-stack decentralized data layer tailored for AI systems that operate in the real world.



Meta’s recent <a href="https://www.forbes.com/sites/janakirammsv/2025/06/23/meta-invests-14-billion-in-scale-ai-to-strengthen-model-training/">acquisition</a> of Scale AI for $14 billion has left a competitive opening in this arena, according to Sandeep Chinchali, Poseidon co-founder and chief AI officer at Story.



“Major AI labs and enterprises have pulled their contracts,” Chinchali told Blockworks. “But the need for high-quality, rights-cleared data hasn’t gone away. It’s only intensified.”



Chinchali, a Stanford-trained AI researcher, brings over a decade of experience in edge intelligence and robotics. His team’s approach combines auto-labeling with human-in-the-loop refinement to scale data acquisition without sacrificing quality.&nbsp;



“We prioritize targeted data collection based on real-world failure modes,” he explained, “and validate every dataset using metadata checks and Story’s programmable IP licensing.”



Applications include robotics, autonomous vehicles, wearables and embodied agents, for which synthetic training data or sources scraped from the internet are insufficient.



Poseidon addresses this gap by coordinating a global network of data contributors through onchain incentives, real-time USDC payments and Story’s licensing infrastructure. The protocol treats data as composable intellectual property, allowing contributors to receive attribution and royalties — not just for raw data, but for derivative works like annotations or synthetic augmentations.



“Poseidon ensures that all contributors in this chain, from original collectors to labelers, receive onchain attribution and participation in downstream value when the data is used to train AI models,” said Chinchali.



Early customers include a top robotics firm and an audio foundation model team sourcing dialect-rich speech data, although Chinchali declined to name them specifically. Poseidon is also partnering with universities and Fortune 500 companies building AI capabilities, he said.



With the seed funding, Poseidon will roll out contributor modules, SDKs and integrated licensing tools. “We’re validating the thesis that Web3 can unlock large-scale, equitable data collection for the long-tail datasets physical AI depends on,” Chinchali said.



Early access is expected before the end of summer. As Poseidon builds out its infrastructure, the bet is clear: In the race to real-world AI, data — not models — will be the moat.



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0xResearch Newsletter

Story-backed Poseidon raises $15M to build AI’s data layer

Katherine Ross

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I had a chance to catch up with Smokey the Bera, and there’s a few things I want to chat about this morning. 



The first is the tokenomics upgrade that just happened with BERA, which Smokey explained is designed to make BERA “more, I&#8217;d say, easy to use for people in terms of just thinking, ‘Okay, I&#8217;m someone who is not deep in the weeds, how do I take BERA and do something productive with it?’”



But let me back up — the upgrade basically takes BERA from a token simply used for both staking and gas, and gives it the ability to potentially become a revenue-generating asset.&nbsp;



Right now: Berachain has BERA and BGT.&nbsp;



“The underlying change that we&#8217;ve put forward…is that now a portion of those incentives that were typically flowing towards BGT from the ecosystem projects will actually go towards buying back BERA, and people who choose to stake their BERA will effectively be able to earn their yield from those buybacks effectively. So right now, 100% of all the incentives in the network flow towards BGT, and it will actually be sort of a 33% split flow towards people who are staking their BERA,” he noted. 



“It&#8217;s somewhere between value redistribution and approachability of the asset as a whole. And I think that what that also means is that there are many more applications within the ecosystem that can now do everything — from stockpiling BERA for their treasuries, to sort of building yield loops around BERA to basically using that as the base asset.”



Berachain launched its <a href="https://blockworks.co/news/berachain-mainnet-debuts">mainnet earlier this year</a>, and its token hit a $1 billion market cap. However, the BERA chart in the past three months is on a downtrend.&nbsp;



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXczXDTTfLYcog1tcDKy1f4Awz612LOokO4ERI592TCXwX6Bbp8vs7o5AicXksiCCTHx97Iy4ymgUf4sq--duvlsaND0uhwr7GBr6rkpYihO77ojGSOUkfE-Z_mm7G_2oo9wSYWkKg?key=y9Os1WI5YWYnwY9hqjORwA" alt=""/><figcaption class="wp-element-caption">Source: Blockworks Research</figcaption></figure>



In February, after the mainnet launch, <a href="https://app.blockworksresearch.com/flashnotes/berachain-launch">Blockworks Research’s Boccaccio noted</a> that “the market has evolved this cycle, moving away from complex DeFi and TVL-focused protocols in favor of trading functionality and fast chains.”



I asked Smokey about how Berachain in general fits into what crypto investors seemingly want at this point.&nbsp;



“We&#8217;re definitely seeing that the worlds of Web2 and Web3 are smashing together, whether that&#8217;s Treasury vehicles or simply more sophisticated capital allocators looking at the space,” he noted. “I think as we increasingly look at blockchains as businesses, that&#8217;s where what we&#8217;ve been focusing on with proof of liquidity becomes a little bit more interesting.”



For Berachain, it’s about finding how it can increase activity by properly investing its resources.&nbsp;



“The chain itself is sort of generating revenue — slash generating real yields — from the applications building on top of it. The applications themselves are also effectively getting a money multiplier on what they&#8217;re spending in that an application will typically say, ‘Okay, I&#8217;m willing to spend $1 worth of my token…in order to receive…emissions from the chain for the use case within my app that I&#8217;d like to support,’” Smokey said.



“And we think that gets really interesting when it comes to the ecosystem as a whole, because what it really means is that, at the end of the day, the chain is putting its money where its mouth is.”



Smokey sees the tokenomics upgrade as a “foundational” step towards ramping up network activity.&nbsp;



He added that Berachain had a lot of hype going into launch, but faced a different landscape post-TGE now that we’re starting to see more attention paid to businesses that either generate revenue or have onchain sustainability.&nbsp;



With fundamentals in play, Smokey added that Berachain plans to “double down on what we’re good at,” while also leaning into what the “market is currently validating.”



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Berachain

How Berachain’s leaning into ‘what the market is currently validating’

This is a segment from The Breakdown newsletter. To read more editions, <a href="https://blockworks.co/brand/the-breakdown">subscribe</a>.



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<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">
“The value of a business is the present value of its cash flows from today to judgement day, discounted at a proper discount rate. Period.”



— Warren Buffett
</blockquote>



The world&#8217;s first publicly traded company tried to rug its shareholders.



When the Dutch East India Company sold shares to investors in 1602, it promised to liquidate the entire concern and return all capital to shareholders in 1612.



That was standard practice at the time: Shareholders invested for a set amount of time, after which they expected to have their capital returned, plus some additional yield.



By 1609, however, it was clear that the company — known locally by its Dutch initials, VOC — had no intention of returning investors’ money, mostly because they didn’t have it.



In addition to trading in spices, the company acted as a de facto navy for the Dutch Republic, tasked with projecting power in the Far East.



But building forts and projecting naval power abroad required long-term investments; so rather than return investors’ money as promised, the company simply kept it.



Shareholders, accustomed to financing single ships for a single voyage, were understandably unhappy.



Protests against the decision to unilaterally convert temporary capital into permanent capital were led by Isaac Le Maire, a former director of the VOC, who publicly campaigned against company management and petitioned the government to force the company’s liquidation in 1612, as scheduled.



It was a long shot: The government was never likely to compel the company building its navy to liquidate.&nbsp;



But the company recognized that Le Maire’s campaign would impede its ability to raise capital in the future.



To placate investors, it offered dividends.



This was not easily done, because while the VOC was doing a brisk trade in spices, its high investment needs meant that it was chronically short of cash.



So it paid the dividends in spices instead.



Between 1610 and 1612, the VOC awarded dividends totaling 163% of equity, according to <a href="https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2116137">one study</a>, but mostly in spices like mace and nutmeg.



Shareholders were skeptical.&nbsp;



Many refused these in-kind dividends, holding out for cash instead — spices were hard to sell and impossible to sell at anything like what the company said they were worth.



But, if nothing else, it was a gesture to reassure shareholders that they had a claim on the company’s earnings.



It was a long while before shareholders were convinced.



In 1616, some of the company’s unpaid dividends were converted into interest-bearing loans.&nbsp;



In 1620, the company was flush enough to pay a 37.5% dividend in cash.



But in 1623, short of money again, the company paid a 25% dividend in cloves.



Dividends continued to be paid partly in spices until at least 1643, after which they were paid in cash and, when the company was short of cash, bonds.



Shareholders continued to grumble, but it did work out for them in the long run: One historian <a href="https://www.businessinsider.com/rise-and-fall-of-united-east-india-2013-11">estimates</a> that the VOC’s annual dividends averaged out to 18% of its paid-in capital over 200 years.



200 years!&nbsp;



VOC’s original investors did not value the shares as a function of 200-year cash flows; they thought they’d have their money back in 10 years.



But the company’s early dividends — paid while it was still a money-losing venture — helped convince investors that shares can have value even if the paid-in capital is never intended to be paid back.



On this point, crypto still has some convincing to do.



<h2 class="wp-block-heading">Spicy buybacks</h2>



In the debate over what percentage of revenue, if any, crypto projects should pay out to token holders, Tom Towbridge, co-founder of <a href="https://www.fluence.network">Fluence</a>, takes an extreme view: 100%.



Towbridge <a href="https://youtu.be/6hRqrJjePRo?si=85XBcsvpC4lrmfL3">reasons</a> that the portion of revenue used for buybacks is a measure of a team’s trust and alignment with token holders, so a team that pays out 100% of revenue is perfectly aligned and presumably trustworthy. 



80% of revenue is still pretty good: “Not a lot of misalignment, but there might be some.”&nbsp;



But when a team pays only, say, 20% of revenue to token holders, “now trust and alignment is very different because management is taking 80% of revenue to do something else with it.”



By that logic, there should be a lot of distrust and misalignment between the owners of pump.fun and the owners of its new token, PUMP.&nbsp;



Unlike in equities, these two groups are not the same because PUMP holders have no legal claim on pump.fun’s earnings or assets.



Still, investors value the token at $4 billion, presumably because pump.fun’s owners have <a href="https://blockworks.co/news/pump-ico-dex-blockworks-research">promised</a> to use 25% of the platform’s revenue to buy PUMP.



It’s possible, of course, that the 75% of revenue retained by pump.fun’s owners will be invested in a manner that ultimately benefits token holders.&nbsp;



But it might also be invested in a new business line that the owners decide is unrelated to the PUMP token. Or in houses and yachts for the management team.&nbsp;



There’s no telling.&nbsp;



It’s therefore probably best to value the PUMP as a multiple of its current cash return — much like the VOC’s pioneering investors did.



From the VOC in 1602 until about US Steel in 1901, investors tended to value stocks only by the dividends they received, assigning no value to a company’s retained earnings.



Ignoring retained earnings made sense because before US Steel set a new standard of disclosure by releasing full financial statements; investors had no idea what companies were doing with them.



Today, token investors are not much better informed, so it similarly makes sense to value many tokens by the rate of their current buybacks and nothing else.



That’s not exactly what people are doing.&nbsp;



Based on revenue for the month of June, PUMP is trading at 40x its annualized buyback.



That equates to a 2.5% yield at the current token price — not crazy by crypto standards, but also seemingly pricing in something more than the current rate of cash return.



By contrast, VOC’s early shareholders effectively demanded all of the company’s cash flow, because they were rightly suspicious of what management was using them for (self-dealing and empire-building, as it turned out).&nbsp;



Even in those early, money-losing years, the company paid as much as it could possibly manage (albeit in mace, nutmeg and cloves), because it had to prove that VOC shares had value.



It’s since been established that shareholders have a claim on earnings, so valuation is easy: Every stock is worth the discounted value of its future cash flows.



Until that’s established in crypto as well, token holders should probably demand bigger buybacks.



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Should token holders demand all the revenue?

Ben Strack

This is a segment from the Forward Guidance newsletter. To read full editions, <a href="https://blockworks.co/newsletter/forwardguidance" target="_blank" rel="noreferrer noopener">subscribe</a>.



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It seems like just about every day we get an update on a company buying bitcoin, ETH or another altcoin — establishing a crypto reserve for the first time, or adding to its pile.&nbsp;



But firms forming and getting these assets on their balance sheet is just phase one, Galaxy asset management head Steve Kurz told me last week.&nbsp;



“To the extent that companies are able to use capital-markets tooling to achieve escape velocity, they’re going to be able to build potential operating businesses and ecosystems around the networks they’re supposed to back,” he said.&nbsp;



Foundations pushing various decentralized systems are generally not exploring the systems’ use cases in the same pointed (and commercial) way, Kurz noted.&nbsp; He added: “So what will be interesting in determining how many are successful is: To what degree do those ecosystems become more vibrant, and where is the synergy between that and the business model of these companies that will have success?”



The original (and behemoth) in this space, Strategy, now holds 607,770 BTC (acquired for ~$43.6 billion) after its latest 6,220 BTC buy. Trump Media said this morning it has accumulated $2 billion of bitcoin and has another $300 million earmarked for an options-acquisition strategy for BTC-related securities.



Also revealed this morning was the creation of The Ether Machine via the combination of The Ether Reserve and Nasdaq-listed Dynamix Corporation. Labeling its aim of “enabling public market investors to access Ethereum yield,” the public vehicle expects to launch with ~400,000 ETH (worth more than $1.5 billion).&nbsp;



We saw Bitcoin Standard Treasury Company say last week it plans to launch with holdings of 30,021 BTC after merging with SPAC Cantor Equity Partners.



And a week before that, ReserveOne said it planned to list on the Nasdaq after combining with (yes, you guessed it) another SPAC — this one called M3-Brigade Acquisition V Corp. The company looks to offer investors access to “a diversified digital asset portfolio inspired by the proposed US Strategic Bitcoin Reserve and Digital Asset Stockpile.”



ReserveOne lists Galaxy Digital as a strategic partner. Galaxy also agreed to help oversee <a href="https://blockworks.co/news/bitcoin-treasury-strategies-sharplink-eth">SharpLink Gaming’s ETH treasury strategy</a>, led by board chair Joseph Lubin.&nbsp;



That brings us back to my convo with Kurz, who noted Galaxy has done business with 15 or so companies who have raised $4 billion to buy crypto. That includes offering execution, custody and risk management services, as well as yield-generation infrastructure.



“The bigger picture is crypto intersecting with public markets in the US [being] the story of 2025,” he said.



By Bitwise’s count, 125 public companies held bitcoin at the end of Q2.&nbsp;



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">Companies are buying bitcoin, Q2 2025 edition <a href="https://t.co/0UxrlIZQvb">pic.twitter.com/0UxrlIZQvb</a>&mdash; Bitwise (@BitwiseInvest) <a href="https://twitter.com/BitwiseInvest/status/1943029893153067193?ref_src=twsrc%5Etfw">July 9, 2025</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



Kraken CFO Stephanie Lemmerman predicted in April that we could see <a href="https://blockworks.co/news/corporate-bitcoin-adoption-boom-inevitable-kraken">more than 10,000 </a>public companies holding BTC a few years from now. Swan Bitcoin CIO Ben Werkman told me in May that corporations could one day hold between 25% and 35% <a href="https://blockworks.co/news/companies-building-btc-treasuries-corporate-reserves">of all bitcoin</a>.



Kurz isn’t so sure about those projections but notes the likelihood of many companies owning at least a little bit of BTC (even if not raising a ton to keep accumulating) — given its scarcity, de-dollarization, etc.&nbsp;



A Keyrock <a href="https://keyrock.com/btc-treasuries-uncovered/">report</a> found bitcoin treasury companies were trading at, on aggregate, a 73% premium to their BTC holdings. Not all will trade at a premium forever — particularly those “being the 10th in line to do the same thing,” Kurz explained.&nbsp;&nbsp;&nbsp;



“If there’s 100 right now and 10 of them achieve scale, what does phase two look like for those that achieve the scale?” the Galaxy exec posed. “And are they able to do more in DeFi to generate yield and stay ahead of the ETFs on performance and hire a great team to build out a broader investment program?”



How these companies’ business models evolve over time is unknowable right now. 



“This is capital-markets-meets-crypto-innovation all at once,” Kurz said. “Some of it will be great, and some of it won’t be great.”



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Galaxy exec: Companies holding crypto is only Phase One

Kate Irwin

This is a segment from The Drop newsletter. To read full editions, <a href="https://blockworks.co/newsletter/thedrop" target="_blank" rel="noreferrer noopener">subscribe</a>.



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Are we ever going to see NFTs boom again? Luca Netz thinks so.



The Pudgy Penguins have become one of the most recognizable brands in crypto since Luca “Netz” Schnetzler took the helm in early 2022, ultimately becoming the CEO of Igloo Inc. and, later, the co-inventor of the Ethereum L2 Abstract.



“I think you&#8217;ll see mania again,” Netz told me in an interview. “I think you&#8217;ll see a version of 2020, 2021, happen. I think you’ll see that again.”



Netz also has the hot take that gaming is even more likely to pop in a big way. “I&#8217;m even more certain about gaming than I am NFTs,” he said.&nbsp;



While the Penguins began as an NFT collection, they’ve since expanded well beyond that with games, meme-inspired social videos, children’s books, and plush toys.&nbsp;



Believe it or not, they’re not trying to make a toy brand. It’s a bigger IP play Netz sees as competing with memes like Doge and Pepe in the short-term — and giants like Pokémon or Hello Kitty in years to come.&nbsp;



Part of the appeal from a brand standpoint is that physical toys can capture a different part of someone’s life and maintain a brand presence when all screens are off. They can also be intergenerational, and hold meaning for adults and kids.



“It&#8217;s not even a great revenue business, to be fair. It makes a lot of top-line revenue, but it&#8217;s not, you know, I didn&#8217;t buy Pudgy Penguins to build a toy business,” he said. “If I made no money on the toys, I&#8217;d be okay with it. If I lost money on the toys, to a certain extent, I&#8217;d be okay with it. Now we make money on the toys, and so it&#8217;s great.”



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">It&#39;s officially full house for Pengu x HATA mansion. <a href="https://t.co/e4HVFOa3wv">pic.twitter.com/e4HVFOa3wv</a>&mdash; Pudgy Penguins Malaysia 🇲🇾 (@pudgymalaysia) <a href="https://twitter.com/pudgymalaysia/status/1947277619415650726?ref_src=twsrc%5Etfw">July 21, 2025</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



Netz bought the Penguins brand three years ago for 750 ETH, or about $2.5 million, at the time ($2.9 million today).



Chatting with Netz, there’s a determination and a confidence that suggests he’s not going to stop until “everybody in crypto” owns some piece of Pudgy Penguin IP and some PENGU, the brand’s affiliated memecoin.&nbsp;



Tapping into the existing crypto-native audience and their families remains one jumping-off point, while expanding beyond into broader consumer markets is another prong of the plan.



Igloo Inc., which owns Pudgy Penguins, Abstract, and the Overpass NFT licensing platform, is “on track” to make $50 million in revenue this year.



“I think the opportunity in the open ocean in crypto today is consumer. I&#8217;ve been saying this for a long time,” Netz said. “The metrics and the data doesn&#8217;t read the same, but I think you take a billion dollars in revenue in consumer and a billion dollars in revenue in DeFi, and I think the consumer founder’s making five times more money.”



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Pudgy Penguins CEO predicts NFT mania, crypto gaming comeback

This is a segment from the 0xResearch newsletter. To read full editions, <a href="https://blockworks.co/newsletter/0xresearch" target="_blank" rel="noreferrer noopener">subscribe</a>.



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DeFi just secured its biggest US policy win yet.



President Trump on Friday <a href="https://blockworks.co/news/genius-act-passes-house">signed the GENIUS Act</a> into law, establishing the first federal framework for stablecoin regulation. The law defines clear standards for reserve backing, consumer protection and AML compliance, while carving pathways for both state and federally chartered issuers. DeFi Education Fund (DEF) <a href="https://defieducationfund.substack.com/p/the-defi-debrief-a62">called it</a> a “landmark” moment for onchain finance.



Importantly, GENIUS trains federal oversight on identifiable, custodial stablecoin issuers while leaving self-custodied wallets and other non-issuer onchain activity largely outside its scope. That makes way for broader market-structure rules (CLARITY) that aim to distinguish decentralized protocols from centralized intermediaries.



Meanwhile, the House <a href="https://blockworks.co/news/us-house-passes-clarity-act">passed the CLARITY Act</a> with key amendments that reversed last-minute language changes that had <a href="https://decrypt.co/330251/crypto-market-structure-clarity-act-defi-us-industry">sparked outcry</a> among DeFi builders and policy experts. The manager’s amendment from HFSC Chair French Hill (R-AR) and Attorney General Chair GT Thompson (R-PA) restored and clarified the DeFi carve-outs in both the securities (§309) and commodities (§409) titles of the bill.



The final House text now explicitly excludes activities like publishing code, operating frontends, running validator nodes or providing wallets from registration requirements, so long as they don’t involve custody or control of user assets. The Commodity Exchange Act&#8217;s DeFi exclusion is once again broad enough to cover most non-custodial spot-market activity.



On the House floor, Rep. Hill <a href="https://x.com/fund_defi/status/1945845318005715352">stated</a>: “DeFi developers do not take custody of user assets, nor do they control user assets. Therefore, we should not treat them in the same way we treat centralized actors.”



Rep. Thompson <a href="https://x.com/fund_defi/status/1945853841070522395">added</a>: “Congress is making an unambiguous statement that DeFi is different.”



These are important articulations of Congress’ intent.



Still, two gaps remain. First, the carve-outs do not extend to derivatives, leaving DeFi derivatives protocols in legal limbo.&nbsp;



Second, the CLARITY Act lacks federal pre-emption, meaning state regulators could still impose conflicting requirements.



However, the Hill-Thompson fix moves CLARITY away from being a potential threat and into the category of a qualified win for DeFi.



DeFi tokens have rallied, institutional interest is robust and the total crypto market cap crossed $4 trillion.&nbsp;



“This regulatory milestone establishes the US as a key jurisdiction for digital assets,” said Fabian Dori, CIO at Sygnum Bank, in comments to Blockworks. “Clear rules on stablecoins and token classification unlock institutional participation at scale.”



Washington is no longer just watching onchain finance — it’s actively protecting it.



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DC embraces DeFi with GENIUS, CLARITY Act amendments

David Canellis

This is a segment from the Supply Shock newsletter. To read full editions, <a href="https://blockworks.co/newsletter/supplyshock" target="_blank" rel="noreferrer noopener">subscribe</a>.



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Today’s topic is a touchy subject for anyone who’s been in Bitcoin for the past decade.



Eight years ago exactly, a key voting threshold was met that would lead to the official adoption of Segregated Witness (<a href="https://en.bitcoin.it/wiki/Segregated_Witness">SegWit</a>), a backwards-compatible scaling upgrade that had been in the pipeline since late 2015.



SegWit would make it technically possible to fit up to 4MB of transaction data within Bitcoin blocks by separating out related witness data into a different construct. A neat workaround to spiritually stretch the block-size limit beyond the Satoshi-imposed 1MB.



Miners had been required to signal their support for SegWit adoption following its original proposal, BIP141, in November 2016. Voting “yes” on the initial proposal meant mining “bit 1” blocks — blocks that had a special variable in their headers.&nbsp;



But after around 18 months, less than 40% of blocks were signaling support. In May 2017, Bitcoin Core contributor James Hilliard submitted a supplementary proposal, BIP91, which added an element of time pressure.&nbsp;



Miners had to signal their support for BIP91 above the threshold by midnight Nov. 15, 2017, or else SegWit would be dropped for good. BIP91 reduced the mark for miner support from 95% to 80% over a period of around 2.33 days (269 blocks out of a 336-block epoch).



On July 21, 2017, enough pro-SegWit blocks had been mined to kickstart the soft fork, to be fully activated by Aug. 24, about a month after the threshold was met.&nbsp;



And this is where things get <a href="https://bitcoincore.org/en/2017/08/18/btc1-misleading-statements/">messy</a>. On a technical level, support for SegWit was cut and dry. Miners either supported it or they didn’t.&nbsp;



It was much muddier at the social layer. The infamous New York Agreement <a href="https://blog.bitmex.com/the-segwit2x-hardfork-part-1-the-supporters-and-opponents/">signatories</a> — which included most mining pools, Coinbase, Circle, ShapeShift and a large portion of Digital Currency Group portfolio companies — pushed for an additional hard fork if BIP91 would activate.&nbsp;



The hard fork, SegWit2x, would effectively double the impact of SegWit, allowing for up to 8MB of transaction data to fit in each block rather than 4MB. SegWit2x was ultimately cancelled months after the launch of Bitcoin Cash which features 8MB blocks.



There have been literal <a href="https://blog.bitmex.com/the-blocksize-war/">books</a> written about the Blocksize War, so I’ll leave it to you to pick those up for more detail about what happened in between the acceptance of BIP91 and the failure of SegWit2x.



Whatever your view of the matter, it’s clear that the definition of Bitcoin for many operators shifted around this time. A notable contingency sought to explore Bitcoin’s “money” properties on a separate chain in Bitcoin Cash, which never really took off.



Did that make Bitcoin — the one with persistent consensus — less “money” as a result?&nbsp;



Obviously not, but considering how the ever-rising price has put a dampener on that particular use case, it’s sometimes hard to tell.



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Bitcoin

Bitcoin is still money, 8 years on from the Blocksize War

Polymarket announced that it acquired derivatives exchange QCEX for $112 million on Monday.&nbsp;



The deal allows Polymarket to re-enter the US market, which it left after <a href="https://blockworks.co/news/cftc-fines-crypto-betting-service-polymarket-1-4-million-orders-shutdown">settling with the CFTC </a>in 2022. The regulator fined the prediction market $1.4 million at the time.&nbsp;



“The transaction marks a significant step toward expanding access to Polymarket&#8217;s category-defining platform in the United States, enabling more users than ever to trade prediction market contracts with regulatory clarity and confidence,” a press release announcing the acquisition said.&nbsp;



&#8220;Now, with the acquisition of QCEX, we are laying the foundation to bring Polymarket home — re-entering the US as a fully regulated and compliant platform that will allow Americans to trade their opinions,” CEO Shayne Coplan said.&nbsp;



Read more: <a href="https://blockworks.co/news/kalshi-2b-valuation-prediction-markets">Why Kalshi’s new $2B valuation makes sense</a>



The acquisition announcement comes after QC Exchange <a href="https://www.cftc.gov/sites/default/files/filings/documents/2025/orgdcmqcexorderofd250709.pdf">filed</a> with the CFTC to be designated as a contract market.&nbsp;



Prediction markets, in recent years, have picked up in popularity. Just last year, the CFTC <a href="https://blockworks.co/news/kalshi-election-markets-cftc">lost a court case</a> to ban election markets in the US, which allowed Polymarket competitor Kalshi to launch such markets.&nbsp;



&#8220;When we began the process to obtain our DCM &amp; DCO licenses over 4 years ago, the prediction market was in its infancy. But we have long believed in its potential to change the way people access and understand information and express their views on that information,&#8221; QCEX founder Sergei Dobrovolskii said.



Earlier this summer, Bloomberg reported that Polymarket was looking to raise funding at a $1 billion valuation. Bloomberg was also the first to report the acquisition.



This is a developing story.



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gambling

Polymarket acquires QCEX for $112M

This is a segment from the Empire newsletter. To read full editions, <a href="https://blockworks.co/newsletter/empire" target="_blank" rel="noreferrer noopener">subscribe</a>.



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Crypto Week, in the end, was a roaring success.&nbsp;



President Donald Trump signed the GENIUS bill at the end of last week, which not only means that he signed the first stablecoin-focused legislation into law, but it’s also quite a significant crypto milestone.&nbsp;



But it’s not the end. There are still two other pieces of legislation making their way through the DC process currently: the CLARITY Act and the anti-CBDC bill.&nbsp;



Paradigm’s Alexander Grieve explained on the <a href="https://blockworks.co/podcast/empire/2a53fff4-640a-11f0-9bd8-7b8a5d8b3495">Empire podcast this morning</a> that he thinks GENIUS was “a baseline” for Congress, and was pretty easy for legislators to understand.&nbsp;



Sidenote: a fun anecdote from Grieve is that “one of the unsung heroes of the GENIUS lobbying fight was a very plucky group of KFC franchisees who blanketed the Hill and talked about how stablecoins can drive down the cost of payments and interchange.”



<iframe loading="lazy" width="560" height="315" src="https://www.youtube.com/embed/EZn6kDKMI9M?si=oORJIDkbFl6RmECX" title="YouTube video player" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" referrerpolicy="strict-origin-when-cross-origin" allowfullscreen></iframe>







One of the recurring topics that comes up in my conversations with folks, and a sentiment I know I’ve expressed multiple times, is how GENIUS is one of the key puzzle pieces that institutions have been waiting for to make their own moves.



Bank of America, which first expressed its <a href="https://www.reuters.com/business/finance/bank-america-expects-launch-stablecoins-morgan-stanley-weighs-use-2025-07-16/#:~:text=BofA%20CEO%20Brian%20Moynihan%20said,it%2C%20without%20giving%20a%20timeline.">desire</a> for a stablecoin a few months ago, reiterated its position in an earnings call last week. Then we also had Charles Schwab’s CEO <a href="https://decrypt.co/330848/schwab-offer-stablecoin-expanding-crypto-services-push-ceo">talking</a> about stablecoins on its earnings call.&nbsp;



But the thing about GENIUS is that it doesn’t just open the door for anyone to issue a stablecoin.&nbsp;



For example, we probably won’t see the likes of Libra, the project <a href="https://blockworks.co/news/facebook-led-crypto-project-diem-to-be-sold-off-for-200m-report">announced</a> by Facebook before it pivoted to Meta and all that jazz.&nbsp;



Basically, Grieve explained, if “financial services isn’t core to your business, then you cannot be an issuer,” according to the new legislation.&nbsp;



“ If those types of companies want to do anything in this space, they&#8217;re going to leverage stuff that others have already built. And so you&#8217;ll still have that kind of segregation between the customer and the issuer themselves.”



That’s not to say we won’t see non-financial firms looking for — and probably finding — workarounds to this in what both Grieve and Jito Labs CLO Rebecca Rettig noted as “creative lawyering,” but it at least sets a bar.&nbsp;



At the end of the day, GENIUS sets the momentum for the other two pieces of legislation, and Rettig noted that she’s interested in seeing what happens with the CLARITY bill in the “next month or so.”



We’re so back.&nbsp;



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<li><a href="https://blockworks.co/newsletter/lightspeed">Lightspeed</a>: All things Solana.</li>



<li><a href="https://blockworks.co/newsletter/thedrop">The Drop</a>: Apps, games, memes and more.</li>



<li><a href="https://blockworks.co/newsletter/supplyshock">Supply Shock</a>: Bitcoin, bitcoin, bitcoin.</li>
</ul>

Empire Newsletter

How KFC franchisees pushed the GENIUS bill forward

Jack Kubinec

Jito is bringing a major upgrade to the way blocks get built on Solana, Lightspeed has learned exclusively.



Jito — whose validator client accounts for 87% of all Solana stake — will begin routing transactions through a piece of infrastructure it’s calling the block assembly marketplace, or BAM. Jito says BAM will limit toxic MEV, make Solana more suitable for perps exchanges and CLOBs, and let apps share revenue with users.



When a user transacts on Solana, chances are that the transaction will go through the Jito block engine, which is essentially an off-chain blockspace auction. The product is a cash cow: Blockworks Research <a href="https://app.blockworksresearch.com/analytics/solana/?dashboard=15">data</a> estimates Jito Labs made roughly $25 million in Q4 of 2024 just from its commission on fees paid via the block engine.



When Jito started out, it didn’t quite expect the block engine to get as big as it did, Jito Labs CEO Lucas Bruder told me. Having become a core part of Solana’s supply chain, the project began wondering what its next move should be. After reasoning that Solana’s market structure is too opaque and seeing the success other chains were having in giving apps better control over transactions, Jito settled on building BAM.



BAM comprises a network of nodes who order transactions and send them to validators running Jito’s soon-to-be-upgraded client. The nodes will run within Trusted Execution Environments (TEEs), so the transaction flow is kept private until execution. Jito believes this privacy can help mitigate some negative MEV strategies like sandwich attacks. The correct order of transactions is provable through onchain attestations, creating an audit trail.&nbsp;



BAM nodes will initially be operated by Jito Labs, but it plans to add more nodes with an end goal of 50-100, Bruder said. Jito also wants to open-source the BAM software later in 2025, Bruder said. Notably, Jito’s current block engine is closed-source.



BAM will also introduce Plugins that let apps and traders create custom sequencing logic. With Plugins, a Solana perps DEX could implement taker speed bumps, for instance, a feature that has been important in Hyperliquid’s success. Apps will also be able to charge fees for Plugin functionality within BAM, and some portion of that revenue could also be shared with validators and the Jito DAO, Bruder said.&nbsp;



Bruder added that he hopes participating apps will send some of this new revenue back to token holders, creating a “big DeFi repricing of tokens on Solana.”



BAM represents likely the largest-ever upgrade to Jito, a protocol that has become very central to Solana.



“BAM is basically decentralizing ourselves,” Bruder said, adding that Jito is taking its learnings from running a core Solana infrastructure project and using it to “create a ton of value for not only Solana as a network, but all the apps on top of it.”



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<li><a href="https://blockworks.co/newsletter/lightspeed">Lightspeed</a>: All things Solana.</li>



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blockchain

Jito unveils major upgrade to block-building architecture

This is a segment from The Breakdown newsletter. To read more editions, <a href="https://blockworks.co/brand/the-breakdown">subscribe</a>.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">
“What the market expects is almost never what happens.”



— Jamie Dimon
</blockquote>



US equities hit all-time highs again this week, and it’s hard to know what that means.



Consider that this is also the week that the president of the United States <a href="https://truthsocial.com/@realDonaldTrump/114873827864802531">called</a> the chair of the Federal Reserve a “numbskull.”



Worse than name-calling, the president went on to say that the FOMC should lower interest rates to 1%, expressly so the government could save “One Trillion Dollars a year in Interest Costs.”



That is the definition of “fiscal dominance”: When a central bank keeps interest rates artificially low to accommodate a government’s deficit spending, with unthinkable consequences presumably to follow.



Fortunately, we’re not quite there yet.



Chair Powell still has 10 months on the job and the president hasn’t figured out how to fire him, although he appears to still be trying.



(We live in a bizarre timeline where the <a href="https://x.com/NickTimiraos/status/1946241807563592044">amount of marble</a> included in the facade of the Federal Reserve building is relevant to monetary policy.)



But the leading candidate to take Powell’s place, Kevin Warsh, is openly offering to subjugate the Fed to the White House in return for the appointment — a Faustian bargain for which we would all pay the price.



This seems like something that markets would worry about: Economists have long warned that fiscal dominance is guaranteed to undermine faith in the dollar, government debt and the entire US economy.



But US stocks continue to levitate and Treasury bonds seem generally unperturbed.



The legendary hedge fund manager Stanley Druckenmiller once said that the best economist he knew was the stock market, so maybe that means we can rest easy?



Can we take the market’s sanguine price action as an endorsement of steep tariffs and Fed bullying? Or is it a prediction that he won’t do what he says he’ll do?



Alternatively, could the market have conceded that tariff and monetary policy are currently too volatile to bother predicting?&nbsp;



Or is it a sign that policy doesn’t matter as much as we thought?



I’m probably overthinking it.



Fed Governor Christopher Waller, who doesn’t seem to be campaigning to be Powell’s replacement, said this week that &#8220;with inflation near target and the upside risks to inflation limited, we should not wait until the labor market deteriorates before we cut the policy rate.&#8221;



The market loves rate cuts, so maybe that’s all that matters.



Or could it be that none of this matters because AI is on the verge of changing everything anyway?



This week, Mark Zuckerberg <a href="https://x.com/TheTranscript_/status/1945528949867794624">said</a> that Meta is “starting to see early glimpses of self-improvement with [AI] models” and that “superintelligence is now in sight.”



Specifically, he thinks we could be as little as two or three years away from artificial intelligence surpassing human intelligence — not just in coding or newsletter writing, but in all fields.&nbsp;



If a world of superintelligent AIs with the capacity to self-improve is less than three years away, should we care whether Fed funds is 1% or 5%? Or whether tariffs are 0% or 50%?



That will be a whole new world, presumably, and the best economist Stanley Druckenmiller knows seems to think it will be a good one.



Let’s hope it’s right. 



Imports are inflating:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXfbzl-dhBz2dBBL6yFcGb0TMvr7_-JL7thN8Jr9sFnJBGFJ8Z2N7N15EtSjOvk4aJKhkMgMvTGRNIJ7EUD_7nD7kQaef0qiA9tR4K9wYzfPGjUiX7HVbW58oCtwlvvBiF8QksYI3Q?key=IIs-8ktBLMjMZqvCmeXjXQ" alt=""/></figure>



An academic <a href="https://www.pricinglab.org/files/TrackingTariffs_Cavallo_Llamas_Vazquez.pdf">study</a> finds that tariffs have caused the price of imports to rise faster than the price of domestic goods. It hasn’t affected the US economy much as of yet, but Ben Cassleman <a href="https://x.com/bencasselman/status/1945472944534151660?t=m9WO7HaG2grZwkEoLWzmjw&amp;s=19">explains</a> why that doesn’t mean it won’t. <a href="https://pca.st/episode/3a6399a4-8292-4064-8e25-e0509d6df36e">Analysts at Morgan Stanley</a> think the economy should start showing the negative impact of tariffs in the third quarter (which is now).



For now, things are pretty good:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXfspY14iokgTv64CipDBb6NQeKPUjvsAJatCVwhS071KsibdZZFmyNirzcEJiAfuo5STYs5ZKKpHBPgmgPjdYhQafAQy7jFIpDQhALcV5Wn3NswpongE1T3bAKkJM9clcHp_zdBdw?key=IIs-8ktBLMjMZqvCmeXjXQ" alt=""/></figure>



Ed Yardeni highlights that the “misery index” — the sum of the unemployment and inflation rates — remains well below the long-term average.



Economists have been too worried lately:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXfy464vL48HPvEwD8p1q9X5yga3h_5mxUlb_Z1PnzLl0ge5AwXir7tXyyxQjb6C4ufRTFj9C2CAOVh_IU2lEM9SZ-UbcjbaB5bR8_NEQ_HjIZ7jiXAsLYLCbZyqSpiP63a005YdBw?key=IIs-8ktBLMjMZqvCmeXjXQ" alt=""/></figure>



<a href="https://x.com/AnnaEconomist">Anna Wong</a> notes that US growth and inflation data have both been better than consensus expectations recently.



It’s been worse than expected for male college grads:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcrZvH3GbEp8fgK8Myb2ipL8ZwLM4dS3iGdUcc9ynmZuFWMx33BN97N68YRKvCzK3PGvdMQ-wJu7WYlsiuVz1wreYN7GBtewV-2g1Sqw_WnH5kZRCPQZrGQIuIXaSk3JjONdfXr4w?key=IIs-8ktBLMjMZqvCmeXjXQ" alt=""/></figure>



The FT columnist John Burn-Murdoch <a href="https://x.com/jburnmurdoch/status/1946220407725384136">notes</a> that young men with college degrees are just as likely to be unemployed as young men without degrees. Women college graduates continue to fare better, probably because they&#8217;re more likely to work in health care.&nbsp;



Don’t blame comp sci:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXdA4a-gJvvtMqF3ar8kcI4m-Df9Ve4fFiXEX8BBC-Gtylrwe6Y0PTriHKx5lB0vIai41yMwCKN0rCnzfv8Xw2vvVaCaS0qvlfBqNRtFPWf-mrCvx3ddiv4-WXitdv4ms897OWX08w?key=IIs-8ktBLMjMZqvCmeXjXQ" alt=""/></figure>



Contrary to popular belief, Burn-Murdoch notes as well that “relative to the pre-generative AI era, recent grads have secured coding jobs at the same rate as they’ve found any job, if not slightly higher.”&nbsp;



US companies are still the best:&nbsp;



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXe7uilBti9UtrLXhe6bkUsaKHim9-b0e0gYiIsEAZvn0cdO0ePSX2ncnFOV1Nrn33CILEhcLKryrNOB7Ze-rDf257XozO6uOjZsbh_oAsL-BS_4dF6vQspyfBWprFqxZalTley9RQ?key=IIs-8ktBLMjMZqvCmeXjXQ" alt=""/></figure>



Goldman Sachs reminds us that big US companies are far more profitable than companies in the rest of the world. They might get even more so: Amazon and Microsoft were both said to be reducing their payrolls by thousands of employees this week, reportedly because they believe they can ask AI to do more of the work.



On the other hand…



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXdlLYeoaQ8Zb9YMghhUF8itsTm5v-vmqVS2zc0IiE5z4HgFDOvwUAV9N-NvflGVAmXPeIrr6VNA2AW2WWKWqUGfyFMLLKonBfcyii0mOrMaEW_0U5xURrLBtI8VWRUdkqCmNu1EXA?key=IIs-8ktBLMjMZqvCmeXjXQ" alt=""/></figure>



By <a href="https://x.com/avtarsehra/status/1941530489363275957?t=uxKm0hWf7HqBW3lJrIU6IQ&amp;s=19">multiple measures</a>, China has pulled ahead of the US in scientific research. Maybe US mega tech companies will make up the difference. But if we’re in a two-country race to superintelligence, now seems like a bad time for the government to be cutting research grants.



New highs are normal:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXeERm154AGQwFF8DeSwyRa575XX0FIuqYC_8rxRksJ2q32kyEdAidpwxCMIfyQBV_vPai-5iVAjsUieZzSy088FG2qBxoBfzpko_3yL44K4vV1MSNa7DQIXe9SFt4BDqUTzwYX6Bg?key=IIs-8ktBLMjMZqvCmeXjXQ" alt=""/></figure>



This graphic from @ryandetrick is a reminder that making new highs is the norm for US equities. This year’s total of nine is still pretty modest.



Zimbabwe stocks made a lot of new highs, too:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXe74H2ba8WCkzQiH5sqnUVSQa02Yh0-17qyS8g5Wq_tLVB7KzaT8nmMahnlJetP6HhYO9MJj2FCd1OXXgpeLeHUsu0s_WiSYwEFFDZnkZvLY4X5MnkAr82mcah7aTXzqoMc08lg?key=IIs-8ktBLMjMZqvCmeXjXQ" alt=""/></figure>



Zimbabwean stock prices boomed during the bout of hyperinflation that started in 2019 — simply because stocks are denominated in the local currency. When the currency was revalued in March, stocks were revalued, too.



Not Zimbabwe yet:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXfqKO-ffZwElxlYWuHOJ2_sZukQ3NWHJuW6DloJPHfFqhnS-D3LxJ3G_GIikOzpNox6KGRbAHTkZhqpQ5HbQxl37_G1EpqjX85tYc5g-2gumW0DsmdhLrQFKNjIfIMdUuxlUwtl?key=IIs-8ktBLMjMZqvCmeXjXQ" alt=""/></figure>



Despite the rising risk of fiscal dominance, the market for forward inflation expectations implies that US inflation will be just 2.3% in five years’ time — which would be great news for the world.&nbsp;



If the market is keeping its faith in the Fed, shouldn’t we all? Jamie Dimon would tell you that’s not how it works, but let’s hope he’s wrong.



Have a great weekend, predictive readers.



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<li><a href="https://blockworks.co/newsletter/lightspeed">Lightspeed</a>: All things Solana.</li>



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<li><a href="https://blockworks.co/newsletter/supplyshock">Supply Shock</a>: Bitcoin, bitcoin, bitcoin.</li>
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Friday charts: Fiscal dominance and super intelligence

This is a segment from the Lightspeed newsletter. To read full editions, <a href="https://blockworks.co/newsletter/lightspeed" target="_blank" rel="noreferrer noopener">subscribe</a>.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



The Solana liquid-staking startup Sanctum has acquired Ironforge in an all-cash deal, Lightspeed has learned exclusively.&nbsp;



Sanctum did not disclose the deal terms. Ironforge’s team, founded by Italo Casas, will join Sanctum, according to a blog post.



Ironforge builds Solana infrastructure, including for landing transactions on the network. With the acquisition, Sanctum plans to add transaction infrastructure as a business vertical.



Sanctum emerged in mid-2024 as a buzzy new Solana startup after going through Solana’s startup incubator. Until now, the project has focused on liquid staking tokens, which are tokenized representations of staked SOL. Its flagship product is INF, a liquid staking token that holds a basket of Solana LSTs.&nbsp;



After a much-talked-about points program gave way to a <a href="https://blockworks.co/news/lightspeed-newsletter-sanctum-airdrop-backlash">somewhat-controversial</a> airdrop, Sanctum has added a couple new business lines. One was <a href="https://blockworks.co/news/solana-liquid-staking-startup-trial">creator coins</a>, LSTs which share rewards with creators. Another was what are essentially <a href="https://blockworks.co/news/sanctum-adding-binance-bitget-bybit-as-partners">white-label LSTs</a>, starting with Binance, Bitget and Bybit. 



It was while working with these partners that Sanctum realized how difficult it can be to land transactions on Solana. The onchain pain became particularly acute during Donald Trump’s <a href="https://blockworks.co/news/trump-more-than-a-memecoin">memecoin launch</a>, which left Solana very congested.&nbsp;



“Solving that problem meant either building a solution from scratch ourselves or teaming up with the best developers already working in that niche,” Sanctum said in a blog post, adding: “Ironforge was that team.”



And so, Sanctum has struck out on a non-LST business vertical for the first time.



“[There are] a profusion of transaction landing solutions on Solana and no good way to observe and adjudicate their performance. [We] aggregate and make observability a first class citizen giving developers full control and observability,” Sanctum co-founder FP Lee said.



Ironforge did not immediately return a request for comment.



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<li><a href="https://blockworks.co/newsletter/forwardguidance">Forward Guidance</a>: The intersection of crypto, macro and policy.</li>



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<li><a href="https://blockworks.co/newsletter/lightspeed">Lightspeed</a>: All things Solana.</li>



<li><a href="https://blockworks.co/newsletter/thedrop">The Drop</a>: Apps, games, memes and more.</li>



<li><a href="https://blockworks.co/newsletter/supplyshock">Supply Shock</a>: Bitcoin, bitcoin, bitcoin.</li>
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Lightspeed Newsletter

Sanctum acquires Ironforge, plots transaction infrastructure vertical

The GENIUS Act is now law.&nbsp;



President Donald Trump on Friday signed the legislation, which provides a first-of-its-kind regulatory framework for US dollar-backed stablecoins.



Growing adoption of stablecoins — tokens pegged to fiat currencies that hold a market capitalization of roughly $250 billion — will have “a profound effect” on dollar dominance and demand for US debt, a senior US Treasury official said on a Friday press call.&nbsp;



More than a crypto bill, the law marks a milestone for payments innovation, the person added — as the federal government is essentially giving an unprecedented vote of confidence to permissionless blockchains.



Read more: <a href="https://blockworks.co/news/stablecon-execs-bullish-stablecoins-financial-revolution">Digesting Stablecon: Execs bullish on imminent financial infrastructure revolution</a>



Trump’s signing of the bill comes a day after the House of Representatives <a href="https://blockworks.co/news/genius-act-passes-house">passed the GENIUS Act</a> in a 307-122 vote. The Senate had advanced the bill last month, when 18 Democrats joined Republicans as part of a 68-30 vote.&nbsp;



The <a href="https://www.congress.gov/bill/119th-congress/senate-bill/1582/text?q=%7B%22search%22%3A%22genius+act%22%7D">bill</a> gives the Office of the Comptroller of the Currency (OCC) substantial oversight over prospective and approved stablecoin issuers. It requires such entities to keep fully-backed liquid reserves — such as cash and short-term Treasury securities — and ensures that those with more than $50 billion in issued tokens undergo annual audits.&nbsp;



The GENIUS Act also essentially requires state regulators to maintain frameworks that are “substantially similar” to those at the federal level. It offers an alternative to the previous “patchwork of state regulatory frameworks” that stablecoin issuers previously had to rely on, the senior Treasury official noted.&nbsp;



On Thursday, the House also <a href="https://blockworks.co/news/us-house-passes-clarity-act">passed the CLARITY Act</a>. That bill, which establishes a definition for “digital commodities” and divides crypto oversight between the CFTC and the SEC, now heads to the Senate.&nbsp;



Steve Kurz, Global Head of Asset Management at Galaxy, told Blockworks that these bills represent a huge unlock for not just crypto-native companies but for the larger financial institutions that Galaxy interacts with.&nbsp;



“It really takes what had been a business plan, a [crypto] working group or a check-the-box exercise and it puts it immediately into ‘Wait a minute, this is here, this is now, this is legal, we have to be doing it [because] our competitors are doing it,’” Kurz explained.&nbsp;



“I think this catch-up moment around digital infrastructure within large institutions is going to surprise a lot of people,” he added.



Read more: <a href="https://blockworks.co/news/franklin-templeton-products-onchain-exec-says">All Franklin Templeton products will one day be onchain, exec says</a>



The bill signing comes as bitcoin has hit a number of new all-time highs this month, peaking around $123,000 this week. 



<a href="https://blockworks.co/news/circle-shares-nyse-day-one">Shares of Circle</a> — the second-largest stablecoin issuer behind Tether — were trading around $225, as of 2 p.m. ET — up 13% from a month ago.



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<li><a href="https://blockworks.co/newsletter/forwardguidance">Forward Guidance</a>: The intersection of crypto, macro and policy.</li>



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<li><a href="https://blockworks.co/newsletter/thedrop">The Drop</a>: Apps, games, memes and more.</li>



<li><a href="https://blockworks.co/newsletter/supplyshock">Supply Shock</a>: Bitcoin, bitcoin, bitcoin.</li>
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