$112K BTC, 10Y Spikes, Klarna Carnage

Another day, another All-Time-High

This Week in Crypto

On the weeklies so far (as of this morning):

• BTC (+3.08%)

• MSTR (-5.69%)

• S&P500 (-2.79%)

• 10Y (+1.6%)

• Gold (+4.82%)

Some strange correlations in there - but it cannot be understated how important it is now that Bitcoin has been trading in line with Gold, while stocks go down and yields go up.

I’ve lifted this excerpt from the TradFi section, as it’s key context for BTC and Gold’s price action:

Treasury yields spiked, with worries that the U.S. government debt could increase by trillions of dollars if Congress passes President Trump’s new budget legislation. 

• The 10Y is north of 4.5% and the 30Y spiked to 5.14%, the highest level since 2007

• Moody’s downgraded the US’s credit rating from Aaa to Aa1

This trend isn’t just limited to the U.S. Japan’s long dated bond yields hit all-time highs this week after the weakest auction demand since 2012. A shrinking Bank of Japan balance sheet and a Q1 economic contraction are putting pressure on the country’s debt markets. Meanwhile, long-term yields are rising across the U.K., Canada, and Europe as global investors grow increasingly cautious about all the factors that influence their credit risk: demographics, geopolitics, inflation, trade tensions, out of control government spending.

As long as this backdrop continues, Bitcoin will continue to perform well.

The ETF complex continues to be a suck on supply, alongside of course more and more Bitcoin Treasury companies popping up all over the world. In addition to all of the US companies such as $MSTR $SMLR buying, copycats are spinning up and performing well ($MTPLF short squeezed 300% this week). H100 became the first one to go live in Sweden this week:

• On Monday:

  • Strategy purchased 7,390 BTC.

  • Metaplanet acquired 1,004 BTC — its second-largest purchase to date.

• Strategy also filed to raise up to $2.1 billion via a 10.00% Series A perpetual preferred share issuance ($STRF), with the proceeds earmarked for further BTC accumulation.

In other news:

• Texas have moved closer to starting their own SBR as a bill passes in the House

• JPM are now starting to allow access to Bitcoin for Clients

• JPM, BOA, Citi and Wells Fargo are in talks to form a consortium and launch their own stablecoin

• Once more for anyone attending Bitcoin Vegas next week feel free to RSVP to our events:

  • Monday VIP Dinner

  • Tuesday Mixer with Mark Moss

  • Wednesday VIP Dinner

This Week in TradFi

We’re back with everyone’s favorite topic - tariffs.

• Wall Street is on track for steep losses today after President Trump recommended 50% tariffs on the European Union.

  • And Apple stock specifically slid after Trump warned that the company would need to pay 25% tariffs if they didn’t make their phones in the U.S. 

• Oil prices dropped 1% today as well and are set for their first weekly decline in 3 weeks, also as a result of the new EU tariffs. 

  • Brent crude futures and U.S. West Texas Intermediate crude futures both fell 64 cents.

• The weekly jobless claims report came out yesterday. The number of Americans filing new applications for unemployment benefits fell last week, suggesting the economy is maintaining a steady pace of job growth in May, though it is becoming harder for people out of work to find new jobs.  

On the international front:

• European stocks also tumbled as a result of the new tariff announcements, and euro zone government bond yields fell sharply. 

  • Stoxx 600 was down 1.5% this morning.

• India is planning on pushing the Financial Action Task Force, a global financial crime watchdog, to add Pakistan back to its “grey list”. India is also planning on opposing upcoming World Bank funding to Islamabad. 

  • They grey list places countries under increased monitoring until they have fixed identified flaws in their financial system. Pakistan was taken off the FATF grey list in 2022, which was essential for Pakistan’s rebuilding economy. 

This Week in Tech

Buy now pay later company Klarna said this week that its consumer credit losses increased to $136M, 17% higher than Q1 of 2024. Kind of an important part of the buy now pay later model is, you know, paying later. 

• However, Klarna assured investors that the company is not alarmed by the rise in unpaid balances, saying they represent just 0.54% of total lending.

• A recent survey found that a quarter of BNPL users are borrowing to pay for groceries, vs. a much lower 14% a year ago - indicating that these companies may be burdening Americans with debt they will not be able to pay off.

• However, the company seems to be doing fine despite this - Klarna’s comparable revenue rose by 15% to $701 million in Q1, and its customer base increased to over 100 million people.

Anthropic launched two new AI models at its inaugural developer conference on Thursday.

• The company announced Claude Opus 4 and Claude Sonnet 4, which can analyze large datasets, execute long-horizon tasks, and take complex actions. 

• Everyone will get access to Sonnet 4, but only paying customers will get access to Opus 4. 

• Opus 4 can maintain “focused effort” across many steps in a workflow, while Sonnet 4 is designed as a “drop-in replacement” for Sonnet 3.7. 

• Claude 4 models are also less likely than Sonnet 3.7 to engage in “reward hacking”, which is when models take shortcuts and loopholes to complete tasks (they’re just like us, huh!). 

OpenAI is acquiring io, the device startup that OpenAI CEO Sam Altman and infamous designer Jony Ive have been working on for two years.

• The deal values the startup at an eye-watering $6.5B. 

• As part of the deal, Ive and his design firm will now lead creative and design work at OpenAI. 

• Ive previously worked at Apple, designing many iPhones, iPods, iPads, and Apple Watches. This new move will help OpenAI compete directly with Apple in the consumer hardware space. 

• Altman and Ive have reportedly been working on a device that moves consumers “beyond screens”. 

As usual, below are some fundraising announcements, M&A, and tech personnel changes that caught our eye:

• LM Arena, a crowdsourced AI benchmarking project, has raised $100M in seed funding, valuing the company at $600M. 

• Account software company Filed has raised a $17.2M pre-seed and seed round, led by Northzone. 

• Scribble Ventures just raised $80M for their third fund, their largest capital raise yet. 

Expense-management software company Affiniti has raised a $17M Series A, just six months after raising an $11M seed round.

Arch is building a next-gen wealth management platform for individuals holding Alternative Assets. Our flagship product is the crypto-backed loan, which allows you to securely and affordably borrow against your crypto.

Disclaimer: None of the above is financial advice, seriously.