Fellow TRU Capitalists,
Welcome to another edition of the TRU Capital Newsletter.
Before we hop in to the news, we have some exciting announcements to share with you
We've been added to Crypto Insights Group, an additional third-party due diligence platform that helps investors vet funds in the digital asset industry.
By being added to the platform, we're further committing to our core values of transparency and being a trusted partner in digital for Family Offices, High Networth Individuals, and Accredited Investors!
Our returns are benchmarked across assets and indices helping investors like yourself review and see the power of investing with our 4 prong approach to DA investing.
If you'd like to learn more about making an allocation with our team to our portfolio and strategies here simply click the button below to book a call.
Terms
Minimum Commit is $250k
1 year lock up, open ended fund
2% management fee
20 performance fee
We're also excited to announce over the past few months, our team has expanded it's footprint across multiple platforms for exposure, and providing access for LPs to join TRU Capital Fund 1.
One of which being Gamma Prime which has over $3.2B in vetted fund placement since inception! Not only is it an honor, but it's exciting to see TRU Capital continue to expand as the digital asset landscape continues to mature!
Now with Fund 1 we are limited to only 99 investors so if you're interested, lock in your spot while you still can.
Now with that said, let's dive into this edition of the TRU Capital Newsletter.
October has been a choppy month for digital assets.
Bitcoin hit a new all-time high of $126,000 before the largest liquidation event in crypto history happened on October 10th.
The SEC approved new altcoin ETPs, and Uptober turned out to be more sideways than expected, even though Trump and China seem to be close to a lasting trade deal.
FLASH CRASH
On October 10th, an estimated ~$20B of liquidation
A lot of this was driven by USDe prices on the Binance exchange. The exchange's price oracles are used by a lot of the digital asset space, but because Binance doesn't have the ability to mint USDe directly, it lost its peg to $1 on Binance.
This is just one of many things that contributed to the clearing of order books and cascading liquidations. The takeaways here are that many things functioned well under this huge stress test, but it was a good reminder of the dangers of trading with leverage.
This is exactly the kind of thing that TRU Capital's strategies are designed to not only protect against, but also benefit from. Holding spot, keeping some cash available to buy the dip, and using non-leverage-based trading algorithms are among the ways our fund turns these kinds of crises into very lucrative opportunities.
At their October FOMC meeting, the Fed cut interest rates to 4% and announced that Quantitative Tightening would be ending on December 1st, which triggered a reversal of the lows for crypto.
Crypto investment products experienced a strong rebound, recording $921 million in weekly inflows, completely reversing the previous week's $513 million outflow. Bitcoin funds led the way with $931 million in inflows, which was their largest weekly total since the start of rate hikes. Trading activity remained robust at $39 billion, which also shows that although the flash crash flushed out a lot of leverage, the market around Bitcoin is still very strong and deeply liquid.
The SEC has approved four new spot ETPs for Litecoin, Hedera HBAR, Solana, and ETH, notably with full staking enabled for some of these products.
This is a huge advancement in the adoption of digital assets and offers more access for investors to get exposure to and benefit from the innovations of the digital asset industry.
These new products took advantage of the SEC's new generic listing standards and were allowed to go live because the government shutdown prevented the SEC from further reviewing or stopping them. But a win is a win!
Tether (USDT) is the dominant stablecoin, boasting over 500 million users and a total supply of nearly $182 billion, significantly surpassing Circle's USDC supply of $75 billion. Furthermore, Tether is reportedly looking to raise $20 billion at a massive $500 billion valuation, positioning it as one of the world's most valuable private companies as it prepares to launch its new stablecoin, USAT, for the US market later this year.
In response to growing global adoption of US Dollar Stablecoins, the European Central Bank is rushing out its Central Bank Digital Currency to compete with the dollar.
It seems as though the EU is desperate to prevent a flight of capital out of their Euro.
These stablecoin wars over currency are going to continue and escalate. There are trillions of dollars of value at stake, and whoever is able to increase their market share of the global currency market will stand to benefit greatly. We will continue to draw attention to this as it plays out.
Mastercard is acquiring crypto infrastructure company Zerohash for $1.5 billion to $2 billion. This move follows Mastercard's defeat in a bidding war against Coinbase for rival stablecoin startup BVNK. Zerohash is an attractive target because it provides a broad suite of crypto services, including APIs for trading, tokenization, and stablecoin payments. It's going to serve as a comprehensive platform for MasterCard to meet the challenge of its rising stablecoin-focused competitors.
Citi has partnered with Coinbase to create digital asset payment solutions for its institutional clients. The collaboration is part of Citi's larger strategy to offer 24/7 digital money solutions, which already includes Citi Token Services and USD Clearing across its vast network. Citi plans to further expand its digital asset offerings by launching native crypto custody services for assets like Bitcoin and Ethereum in 2026.
In another stunning pivot, Jamie Dimon, CEO of JP Morgan, admitted he was wrong about crypto and agreed publicly with BlackRock CEO Larry Fink that the entire financial world will be tokenized very soon.
In addition to the banks offering more support, the real competition is heating up in BBLOCs (Bitcoin Backed Lines of Credit). Founders Fund has entered the arena offering 5% Lines of Credit... instantly without KYC. I broke this down in my recent LinkedIn Post but this a game changer!
I remember just a few years ago, the only loan products with bitcoin as collateral available were charging 10-15% rates. With more compression in this side of the market, many bitcoiners are able to access liquidity WITHOUT returns being cannibalized by the rates.
Vanguard also announced that it will begin offering access to digital asset products to its clients after promising that it never would, and Morgan Stanley's Global Investment Advisory Committee updated its portfolio recommendations to include a 2-4% allocation to digital assets like Bitcoin and ETH.
This is another example of how digital asset adoption is inevitable, and ultimately, everyone will use it because it benefits everyone.
Securitize, the Leading Tokenization Platform and partner of BlackRock, announced plans to become a public company at a $1.25B valuation via a business combination with Cantor Equity Partners II.
This is a huge leap forward in the legitimization of the tokenization revolution and the adoption of tokenized assets
.
In October, BlackRock’s BUIDL deployed ~$500M each to Polygon, Avalanche, and Aptos. This ~$1.5B total injection reflects increasing demand and belief in real-world assets (RWAs). These assets have been attracting TradFi involvement during volatile periods by offering stable yields (4-6% on tokenized treasuries) and liquidity without the speculative leverage that contributed to the flash crash on Oct. 10th.
Securitize will be the first public securities-focused tokenization infrastructure company, but far from the last.
The Treasury General Account being refilled has been draining liquidity from the system. The Federal government being shut down for most of a month has also prevented spending, slowed investment, and dampened economic activity.
However, we expect the government to reopen following election day and return to spending.
The Federal Reserve's lowering of interest rates and ending quantitative tightening on Dec. 1st will also help ease liquidity conditions and encourage investor action.
It seems as though the market is still poised for a very strong Q4 and we expect Bitcoin and digital assets to begin to outperform again once this bullish momentum and liquidity return to the market.
Hopefully, November will deliver on the expectations that were built up for Uptober.
Until next time, remember that this is TRU Capital. We believe capital is value, cryptography is truth, and Truth is priceless.
"Buy the truth, and sell it not" - Proverbs 23:23 KJV
HODL,
The General Partners of TRU Capital
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