In the Arena | June 1, 2025

“3 observations and a chart” on the latest in the digital assets sector

New Hampshire and Arizona become first two states to pass “Bitcoin Reserve” legislation – government engagement with digital assets accelerating 

In early May, New Hampshire became the first state to permit its treasury to invest in digital assets. Governor Kelly Ayotte signed into law a bill that permits up to 10% of the state’s general fund to be invested in digital assets with more than a $500 billion market capitalization, which currently includes only bitcoin. The state treasury may invest directly or through ETFs and may self-custody or use qualified custodians. Arizona followed shortly thereafter creating its own Bitcoin Strategic Reserve. The Arizona law channels profits from unclaimed property into digital assets held in the Arizona Bitcoin & Digital Assets Reserve. Other states, including Illinois, Maryland, Michigan and Texas are also considering similar legislation. We highlight the continued adoption of digital assets by national and state municipalities.  

Stripe unveils new stablecoin payment system – leading payment processor integrating blockchain technology into products

Stripe, one of the world’s largest payment processors ($1.4 trillion in payments in 2024), unveiled a new money management feature for clients using US dollar stablecoins. The company, which acquired stablecoin platform Bridge three months ago for $1.1 billion, will allow businesses in 101 countries to hold balances in stablecoins, receive funds on both crypto and fiat rails, and send stablecoins almost anywhere in the world. By launching Stablecoin Financial Accounts, Stripe can skip the slow and expensive correspondent-bank maze, cut out payment networks, and compete directly with banks and card networks. Participating businesses will be able to hedge against local inflation and more easily access and participate in the global economy. We highlight incumbent fintechs building solutions that facilitate moving money faster and cheaper around the world on crypto rails and that will supercharge adoption of digital assets and an on-chain economy. 

Coinbase added to the S&P 500 – First they fight you, then they add you to the S&P 500

Coinbase (ticker: COIN) was added to the S&P 500 on May 19, becoming the first pure-play crypto company in the index. The announcement led to a 24% surge in Coinbase’s stock after the May 12 announcement. Analysts at Bernstein estimate that COIN could see around $9 billion in passive flows from S&P 500 linked funds and potentially $7 billion in buying from active funds. Until recently, Coinbase was engaged in existential litigation with the SEC. That litigation has since been dropped and Coinbase continues to expand its product suite, including having recently agreed to acquire Deribit, the leading digital assets derivative platform, for $2.9 billion. We highlight this pivotal moment and rising significance of the digital asset sector in the financial ecosystem.

Chart of the Month – Crypto Developing Killer Use Cases: Stablecoin transaction volume surpasses Visa in 2024…

Arena Digital Capital Partners is a liquid evergreen fund open to monthly subscriptions. We are always happy to discuss further with you or investors you think may have an interest in the sector. Please reach out to Bill Cline at williamc@arenadigital.capital.

Sincerely,

The Arena Digital Capital Management Team

Michael Schwartz, Michael Prober & William Cline

www.arenadigital.capital

Arena Digital Capital Management was founded in January 2022 by three experienced traditional finance hedge fund professionals who have been deploying personal capital in the digital asset ecosystem since 2018. The team has managed billions of dollars of capital for high net worth individuals, family offices, and institutions ranging from pension plans and endowments to sovereign wealth funds. We have worked closely with institutional consultants, RIAs, and other advisors in serving their clients.

In May 2022 we launched Arena Digital Capital Partners, with the goal of providing a multi-strategy investment vehicle to access the digital asset ecosystem. Our mandate is to offer broad exposure across the growing digital asset and blockchain sector with an appropriate level of diversification, professional oversight, and manager selection. Our collection of skill sets and our history in the business allows us to understand, assess, and engage with the practitioners of this nascent asset class with a level of diligence required to be responsible stewards of capital. We are happy to periodically share our observations with you.

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