In the Arena | May 1, 2025

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

Mastercard partners with Kraken to bring digital asset payments to over 150 million merchants in Europe – new debit card to provide familiar shopping experience 

Mastercard announced a partnership with Kraken, the leading digital assets exchange in Europe, to enable crypto holders in the UK and Europe to use digital assets for payments at over 150 million merchants worldwide. The companies expect to roll out physical and digital debit cards that are connected to digital asset balances and allow consumers to use digital assets in everyday transactions. Importantly, consumers will have a familiar “credit card” shopping experience while paying with digital assets. We highlight innovations using digital assets and the instant transfer and settlement benefits of blockchain technology in ways that are consistent with current consumer behavior and expectations. 

Bitcoin decouples from US equity markets – outperforming S&P 500 & Nasdaq 100 since Election Day and “Liberation Day”

We think that Bitcoin is a digital store of value or “digital gold.” It has been the best performing asset in 12 of the last 15 years. As a digital store of value, many consider it to be a long-term hedge against dollar debasement and/or global de-dollarization. However, some critics point out high correlations with equities during short term periods of stress. While we note that the period since Election Day on November 5, 2024 and "Liberation Day” on April 2, 2025 are short sample periods, we call attention to the outperformance of Bitcoin against US equity indices like the S&P 500 & Nasdaq 100 during these two periods of uncertainty. Bitcoin is up 41% since November 5 and 12% since April 2, compared to the S&P 500 (-4%, -3%) and Nasdaq 100 (-4%, -1%) (to April 28, 2025). We highlight a decoupling that argues for inclusion of Bitcoin in standard asset allocations.  

Fidelity & Charles Schwab increase spot digital asset offerings in retirement and brokerage accounts – digital assets increasingly available “where the money is”

Fidelity, which has $15.1 trillion of assets under administration and is the largest provider of 401(k) retirement accounts, and Charles Schwab, which has over $10 trillion of assets under management, are expanding direct digital asset investment options for clients. Fidelity has launched no-fee crypto IRAs that allow people to invest directly in Bitcoin, Ethereum and Litecoin in tax-advantaged accounts. The assets are held in custody by Fidelity Digital Assets in cold wallets for optimal security, and customers can use Roth, Traditional or Rollover IRAs. Schwab plans to launch direct spot crypto trading within 12 months for brokerage account clients. The company has seen rising demand and intends to create a trusted platform to increase accessibility, liquidity and legitimacy for digital assets investors.  We highlight incumbent investment management powerhouses addressing demand for digital assets with products and access that meets the capital where it is held – at brokerages and retirement platforms.

Chart of the Month – Institutions Are Significantly Underinvested in Bitcoin and Digital Assets

Source: Research Report, “What’s Driving Bitcoin Adoption in 2025” by River Learn, https://river.com/learn/files/river-bitcoin-adoption-report-2025.pdf

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.

---