In the Arena | September 1, 2025

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

“From the leaves of a buttonwood tree to ledgers on a blockchain” – SEC Chair Atkins announces “Project Crypto”

Last month, SEC Chairman Paul Atkins unveiled “Project Crypto,” a commission-wide initiative to modernize securities regulation for on-chain markets and cement US leadership in crypto and blockchain innovation. Atkins envisions a future where all assets—stocks, bonds, currencies, and more—move on public blockchains, with decentralized finance playing a major role in the global financial system. He pledged a regulatory environment that fosters innovation, marking a clear break from the enforcement-heavy posture of prior administrations. Project Crypto will address critical issues such as digital asset custody, trading rules, and distinguishing between securities and non-securities, with an emphasis on attracting blockchain enterprises back to US soil. We highlight an extremely bullish signal for the embrace of digital assets in the US, positioning the country at the forefront of the next generation of global finance.

Trump opens billions in 401(k) retirement accounts to crypto and alternative assets

On August 7, 2025, President Trump signed an executive order permitting 401(k) plans—encompassing an estimated $12 trillion—to invest in alternative assets like digital assets, private equity and real estate. The order directs the Department of Labor, SEC, and other regulators to update fiduciary guidance under ERISA to enable these options, potentially via ETFs and professionally managed funds. It would unlock a massive pool of retail capital for digital assets and could catalyze broader acceptance by financial advisors and plan providers. Major investment firms like Blackstone, Apollo, and BlackRock are already positioning for this anticipated inflow, underscoring growing institutional confidence in crypto as a long-term asset class. We highlight a landmark development for crypto’s integration into traditional finance. 

DEA seized digital assets linked to Sinaloa cartel – crypto not useful for criminal activity 

US law enforcement recently dismantled a major Sinaloa Cartel operation by seizing over $10 million in cryptocurrency, underscoring a key truth: blockchain transactions may seem anonymous, but they’re pseudonymous—and highly traceable. The DEA and FBI, during a Florida operation amid a broader fentanyl crackdown, traced illicit proceeds across public ledgers back to cartel-linked wallets. Using blockchain analytics, agencies followed the money trail—despite criminals’ attempts at obfuscation via cross-chain swaps—and successfully froze the assets. This demonstrates that, contrary to popular belief, digital currency isn’t a safe haven for illicit actors; public blockchains enable investigators to uncover and intercept illicit finance with precision. We note the fallacy in one of the popular criticisms that crypto is only used for illicit purposes; not only is it not true, but digital assets are very traceable by law enforcement.

Chart of the Month – Bitcoin Bull Market Not Over: Zero of 30 market peak indicators hit

Source: The Pomp Letter, “Is The Bitcoin Bull Market Over?”, August 21, 2025.

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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