Weekly Top Stories - 8/15/25
In this week's newsletter, Alex Thorn analyzes newly disclosed data about the U.S. Strategic Bitcoin Reserve; Will Owens covers the all-time highs reached this week by BTC and the overall crypto market; and Lucas Tcheyan asks why so many corporations are spinning up their own layer-1 chains.
Bitcoin Hits Another All-Time High; ETH Stages Comeback
On Wednesday, Aug. 13, bitcoin surged to a new all-time high of $124,496. Ethereum’s native token ETH also pumped to $4,791, just shy of its November 2021 ATH of $4,866. Total crypto market cap hit a new record of $4.16 trillion, reaffirming the strength of this cycle.
All this occurred alongside strong performance in U.S. equities. Even so, BTC's move pushed it past Google parent Alphabet's stock to become the fifth-largest asset in the world by market cap.
ETH has been especially strong in recent weeks. Ethereum ETFs have been outpacing bitcoin ETFs in both inflows and performance (see Chart of the Week, below). This is notable because ETH has underperformed for most of this cycle. Since bottoming around $1,400 in April, ETH has more than tripled in price.
OUR TAKE:
There has been a persistent institutional bid for digital assets all summer. The regulatory environment continues to improve, institutions are embracing stablecoins, and even TradFi firms are launching their own L1s.
At the center of this momentum is the gold rush of digital asset treasury companies (DATCOs). ETH treasury companies, especially, have emerged as one of the most potent drivers of price action.
These firms are now, by most accounts, the hottest things in crypto. ETH DATCOs are injecting meaningful capital into the market, and because ETH is a smaller asset than BTC, that capital is moving the price faster. A $1 billion DATCO investment in ETH affects the market much more than the same amount deployed into BTC.
On top of this, many of the treasury companies are still just gearing up. A lot of announced capital has yet to be deployed. It’s no surprise we are seeing more SOL, ETH, and altcoin treasury strategies, because the capital required to move those markets is materially smaller than for BTC.
But don’t get too comfortable. By Thursday afternoon, BTC had retraced to $117,800 after stronger-than-expected producer price index data dampened hopes for a rate cut. This market has legs, but it faces macro headwinds. – Will Owens
Bessent Discloses Size of U.S. Bitcoin Reserve
Speaking to Fox Business on Thursday morning, Treasury Secretary Scott Bessent said “the bitcoin reserve at today’s prices is somewhere between $15 [billion] to $20 billion.” This is the first time the U.S. Treasury has revealed the size of the Strategic Bitcoin Reserve (SBR), which was created by President Trump’s March 6 executive order, “Establishment of the Strategic Bitcoin Reserve and United States Digital Asset Stockpile.” Given Bessent’s range and spot prices between $117k and $124k, the reserve contains somewhere between 120k and 170k BTC.
Most blockchain analysts tag U.S. government bitcoin holdings around the 200k BTC range. This analysis is largely based on known U.S. government seizures from various confiscations, including ~95k BTC recovered from Ilya Lichtenstein and Heather Morgan (aka “Razzlekhan”), who pled guilty in 2023 to money laundering conspiracy charges connected to the theft of almost 120k BTC from crypto exchange Bitfinex in 2016. Though the executive order mandates the SBR’s creation, it does not require that Treasury disclose the size of the reserve. And while analysts have ideas about which and how many coins are under the government’s control, it remains unknown to the market which of these funds are legally eligible to become part of the Strategic Bitcoin Reserve. Bessent’s disclosure Thursday on Fox News was the first time any high-ranking government official had provided any such number.
Bessent did also appear to say that the government would not purchase Bitcoin for the reserve, and that it would only hold coins confiscated. He later clarified on X, writing: “Treasury is committed to exploring budget-neutral pathways to acquire more Bitcoin to expand the reserve, and to execute on the President’s promise to make the United States the ‘Bitcoin superpower of the world.’”
OUR TAKE:
Only coins that Treasury deems to be “finally forfeited” to the government can be made part of the Strategic Bitcoin Reserve. Much of the government’s bitcoin was confiscated as part of many criminal investigations across the government’s 93 U.S. attorney jurisdictions. Such coins may not be deemed finally forfeited until a court specifically enters a final judgment of forfeiture. Even then when title is officially deemed to belong to the U.S. government, there are some statutory requirements for how the funds can be used (under 28 U.S.C. § 524(c)), such as to fund program costs, equitable sharing distributions to state or local agencies, or victim compensation. It’s not entirely clear whether the government can create the Strategic Bitcoin Reserve absent changes to federal law. This is undoubtedly among the things Treasury has been working to determine since the March 6 executive order.
Identifying which coins it can legally consider the government’s property is an important step in Treasury’s work creating the reserve, and the fact that Bessent disclosed an amount suggests that Treasury has made progress on this important question. The state of the reserve and Treasury’s communications regarding it are exactly in line with Galaxy Research’s Dec. 31, 2024 year-ahead predictions piece, in which I wrote: “The U.S. government will not purchase Bitcoin in 2025, but it will create a stockpile using coins it already holds, and there will be some movement within the departments and agencies to examine an expanded Bitcoin reserve policy.”
Regardless of whether the U.S. finds and enacts ways to buy or otherwise acquire bitcoin for the reserve, the idea that the world’s largest government would strategically hold bitcoin at all was unthinkable just 18 months ago. El Salvador has strategic bitcoin holdings, though it has scaled back some of its HODLing ambitions apparently as a condition of receiving a new IMF loan. A German state government sold its confiscated bitcoin last summer and the U.K. has been floating plans to sell around $7 billion of its confiscated bitcoin.
The United States’ forward-leaning policy on strategic bitcoin is an outlier, but the real question is whether it turns into a leader that other nations follow. Many believe that the existence of a U.S. SBR could result in urgency from both allies and adversaries to follow suit or avoid ceding strategic digital ground.
Time will tell, but for now we have our first marker: the United States Secretary of the Treasury thinks that the U.S. government strategically holds 120,000 bitcoin or more. – Alex Thorn
Stripe and Circle Roll Their Own Chains
Stablecoin issuer Circle and fintech giant Stripe both revealed plans this week to launch their own layer-1 (L1) blockchains. Stripe is building Tempo, an Ethereum Virtual Machine (EVM)-compatible L1 designed for stablecoin payments and enterprise adoption. The chain aims to deliver faster, cheaper cross-border transactions. Its existence came to light via a job posting for a product marketing role describing Tempo as a “high-performance, payments-focused blockchain.” Notably, Paradigm co-founder Matt Huang will serve as Tempo’s CEO. The news follows Stripe’s two major crypto acquisitions this year, Bridge (a stablecoin infrastructure provider) and Privy (a crypto wallet provider).
Circle, issuer of USDC, the second-largest stablecoin in crypto, also announced Arc, its own EVM-compatible L1. In its formal launch announcement, Circle argued that existing blockchains “weren’t designed with stablecoins in mind.” Arc will use USDC as its native gas token, offer optional privacy features, integrate built-in compliance tools, and include a foreign exchange engine for 24/7 onchain settlement and trading. The validator set will be permissioned, with a public testnet slated for later in 2025 and mainnet launch expected in early 2026.
OUR TAKE:
As more companies enter the crypto space, they face a critical strategic decision: build on top of existing infrastructure or launch their own chains? If Circle and Stripe are any indication, many firms are likely to choose the latter.
Why? There are many considerations, but the most compelling reasons are value capture, control, and chain design. For Circle, which faces compressing margins, owning the L1 prevents any value leakage as they control the underlying chain where all transaction activity occurs without relying on an external blockchain that charges its own network fees while enabling the company to create monetization channels via transaction fees. For Stripe, which has a large non-crypto business, a purpose-built chain enables smooth integration with its software stack and customer base. Control is equally critical for both, given their need to ensure strict regulatory compliance and prevent illegal activity from occurring on the chain.
This is likely a contributing factor behind the companies’ decision not to launch L2s. While an L2 might provide autonomy at the execution layer, it is still dependent on the underlying L1 for settlement and can be affected by changes to the consensus layer’s economic or technical design. Additionally, while building on an established network offers access to its user base, this is probably less compelling for Stripe, whose customer base is largely non-crypto, and for Circle, which is betting on new USDC customers being chain-agnostic.
In the payments space specifically, the L1 approach is gaining traction. Recent examples include Ethena’s Converge, and the Bitfinex-backed Plasma and Stable chains. Uniswap, Hyperliquid, and many others have also decided that launching their own chain is the right decision.
Two notable exceptions are Coinbase and Robinhood. Coinbase’s choice to launch Base as an L2 was heavily influenced by its alignment with Ethereum’s ecosystem, while Robinhood is prioritizing speed-to-market by leveraging Arbitrum’s Orbit stack. In both cases, the decision reflects a strategic trade-off, sacrificing some control and value capture in exchange for ecosystem alignment, faster deployment, and reduced technical lift.
Architecture decisions aside, Stripe’s decision to launch an L1 is a significant endorsement of blockchains as a core layer in financial infrastructure. As one of the largest backend financial tech providers (processing over $1 trillion in payments annually and holding 17% of the global payment processing market), Stripe’s decision carries significant weight. That it sees blockchain integration as worth pursuing signals where the payments industry is heading. If Stripe can prove practical benefits, whether they be lower costs and improved margins, or a more composable developer ecosystem, it could spark a broader wave of blockchain adoption. And competitors will likely have to adapt, or risk being left in the dust. – Lucas Tcheyan
Chart of the Week
Ethereum exchange-traded products (ETPs) have seen record inflows and have outpaced flows into Bitcoin ETPs for the last 4 weeks. Until the last several weeks, Ethereum ETPs had seen tepid interest since launch in July 2024. As on the Bitcoin side, BlackRock and Fidelity’s issuances are leading the pack among Ethereum ETPs, but all have seen flows in recent weeks. BlackRock’s ETHA alone has seen more than $100m in net inflows every day over the last 6 days, and more than $500m on three of the last six days. The fact that the flows are nominally outpacing Bitcoin is particularly notable given that Bitcoin is more than 5x the market cap of Ethereum, which just shows how dramatically demand for ETH ETPs is currently outpacing BTC ETPs. They have a long way to go to catch up to Bitcoin, though. Since launch, Ethereum ETPs have seen $12.7 billion in net inflows while Bitcoin ETPs have seen $54 billion.
Other News
🤦♀️ Google app store bans wallets without licenses, later exempts noncustodial ones
🤝 Nakamoto closes merger with listed company, with $640m of dry powder to buy BTC
🤕 Coinbase loses $300K in MEV exploit after misstep with 0x swapper contract
🎭 MetaMask is set to unveil plans for new stablecoin, anon source tells Decrypt
👔 Bank lobby urges Congress to close stablecoin interest ‘loophole’ in GENIUS Act
😱 Qubic claims successful 51% Monero network takeover
🏛️ Shares of Bullish soar in NYSE debut after crypto exchange prices IPO
🍌 Justin Sun sues Bloomberg over plans to publish 'confidential' crypto holdings
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