Make-it Capital Edition #50
THE WORLD AS WE SAW IT IN JULY 2025
The World of Cryptocurrencies
July was clearly a great month for the crypto markets. The entire market gained $621 billion in value, the most since November 2024. There are many forces at play, and I’ll try to briefly highlight some of them. Ethereum has stolen the limelight from Bitcoin by increasing its market position by 32% and gaining a dominance of 11.90% to the detriment of Bitcoin. It might be wise to be more cautious in August, as this month has proven to be 50% bearish in its short history since 2010. It is better to keep enthusiasm in check. “Excessive enthusiasm is a fever that consumes reason, leaving only ashes of regret.” — Thomas Hobbes in Leviathan (1651).
In July, Bitcoin reached a new all-time high of $123,091 — an increase of 31.5% before retreating $115,970 as of 31 July. In any case, experts predict that Bitcoin’s future growth will be slower and less volatile than in previous cycles. Bitcoin’s realized volatility has fallen significantly: from 100% in 2021 to currently 29.5%. This slowdown is attributed to the maturation of Bitcoin and the involvement of experienced traders making smarter bets, which affects the likelihood of the coin making wild swings. The derivatives market has evolved significantly: Options contracts rose from $15 billion in 2021 to over $43.5 billion now. And Bitcoin ETFs are attracting massive institutional capital. While dramatic price swings may still occur, they are likely to play out in a tighter timeframe as Bitcoin attracts more mature institutional investors.
The most important event of the month is undoubtedly the passing of the GENIUS Act (and upcoming CLARITY Act), which clears the way for a global supremacy of U.S. dollar backed stablecoins, The stablecoin market has recently reached the same level as the Eurodollar market of the 1960s ($260 billion) — only four times faster. As a reminder, the Eurodollar market is a term for a US dollar held in a European bank account. It emerged around 1955, when an arbitrage opportunity resulting from interest rate differentials was exploited. Today, the Eurodollar market is of immense importance due to its size, liquidity and influence on international finance, with a total volume of $14 trillion. More and more experts are predicting that the stablecoin market will grow to more than $1 trillion (i.e. increasing fourfold from here) by the end of this year. And in time, it will surpass the size and scope of today’s Eurodollar. That is a bold statement. Why would there be such an exponential shift? Well, stablecoins increase the demand for US government bonds, thus lowering interest rates. This is the main reason why stablecoins are being promoted by a bipartisan majority and President Trump in particular. In 2024, stablecoins were the third largest buyer of short-term treasuries. Only JP Morgan’s money market fund and China bought more. And according to a recent report by the Bank of International Settlements (BIS), stablecoins will become the decisive factor governing interest rates and thus the most influential sector of the global financial system. To put this into figures: The total amount of outstanding short-term treasuries is $5.78 trillion. Stablecoins therefore account for around 4.5% of the supply of short-term U.S. debt today. However, Treasury Secretary Scott Bessent expects the market capitalization of stablecoins to explode to $3.7 trillion over the next four years. If we consider that short-term treasuries are likely to account for at least 90% of this sum, stablecoins could, ceteris paribus, account for more than 57% of US short-term debt. Revolutionary.
The value traded with stablecoins is already staggering. In 2024, a transaction volume of $27.6 trillion was processed with stablecoins. That is more volume than Visa and Mastercard combined. Stablecoins backed by the US dollar treasuries are changing the global financial system. The most important modernization of the global dollar system since the Bretton Woods Agreement of 1944 is not being driven by central banks. It is being driven by technological innovation, computer code and demand — global demand. Demand extends from Turkey to Pakistan, from Argentina to Nigeria. Citizens see stablecoins as the only way to escape rampant local inflation. And they can do this without having to open a US dollar account, but rather with a few simple steps online. This new system is emerging from the bottom up. It is market-driven. It doesn’t need anyone’s permission and it’s global. And in every sense — value, utilization, reserves and liquidity — it is denominated in US dollars. We are witnessing the stealthy rise of a borderless digital empire. And it is spreading not by force, but by choice. Many market commentators have been calling for the end of the US dollar’s reserve currency status for several years now. However, this is not the end of the dollar’s supremacy. It is the upgrade. Should you still think the US dollar is doomed, here is a recent article by JP Morgan for you (De-dollarization; Is the US dollar losing its dominance?):
https://www.jpmorgan.com/insights/global-research/currencies…
The recovery of Ethereum (ETH), which carried ETH up+47.68% in July, took some market participants by surprise. What were the reasons for this stratospheric moonshot? Well, firstly, over 85% of above stablecoin transactions are happening on Ethereum and its layer-2 ecosystem (Arbitrum, Optimism, Base …). Institutions agree and have started to accumulate ETH. Tom Lee, Chairman of Bitmine Immersion Technologies — the Bitcoin miner now using ETH as a treasury asset — sees ETH as a “stablecoin play” and believes that companies will use ETH to have a stake in the network and run their own stablecoins.
Second, ETH has steadily moved away from liquid, tradable environments and migrated to passive, locked or strategic holdings — a pattern consistent with the behavior of stores of value. From a monetary perspective, this behavior is similar to “hoarding dollars” in uncertain times, according to the the most recent DeFi Report, with users preferring to store value in ETH rather than actively trade or speculate with it.
Thirdly, staking has turned ETH into a high-yielding asset. The number of ETH staked rose by 4% to 35.6 million ETH or 29.5 % of the supply — a new all-time high. Overall, ETH is thus more akin to a yield-bearing financial instrument than a speculative commodity.
Finally, Ethereum’s Layer 1 (L1) is moving away from its role as a transaction engine and evolving into a capital base and settlement layer — the key characteristics of a monetary infrastructure. Daily transactions on Layer 2 (L2 — Arbitrum, Optimism, Base, …) have surpassed L1 by 12.7x; the number of active L2 addresses exceeds the number of L1 addresses by 5x, while L2 also runs 5.7x more smart contracts. Despite this migration, the Total Value Locked (TVL) on L1 increased by 33%. Real World Assets (RWAs) on Ethereum’s L1 increased by 48% quarter-on-quarter to $7.5 billion, led by tokenized Treasuries (+58%) and Commodities (+24%). This development is similar to traditional systems where secondary platforms handle the volume and base institutions finalize settlement. In the case of Ethereum, the L2s handle the activity, while the mainnet acts as a “bulletproof blockspace” to finalize and secure settlements and the network as a whole. ETH is the reserve asset that anchors this structure.
New exchange-traded funds (ETFs) for cryptocurrencies beyond Bitcoin and Ethereum are being planned. Several fund managers have submitted applications for the launch of spot ETFs for Solana (SOL), XRP, Cardano (ADA), Cronos (CRO), Litecoin (LTC), Hedera (HBAR) and even Dogecoin (DOGE). In total, the SEC is reviewing over 70 crypto ETF filings, with many focusing on altcoins beyond BTC and ETH. Bitcoin ETFs saw a monthly net inflow of $6.02 billion while Ethereum ETF inflows showed a record monthly net inflow of $5.43 billion — given recent developments around ETH, not surprisingly the highest monthly amount since their launch in July 2024.
According to BitcoinTreasuries.net, as of July 31, 289 corporate and private entities as well as ETFs and governments hold 3.65 million bitcoin. The majority of these are held by ETFs (1.46 million BTC), followed by public companies with 0.96 million, governments with 0.53 million and private companies with 0.29 million.
One of the reasons for a new demand dimension for crypto have been crypto treasury companies or DATs (digital asset treasuries). There are currently 163 public companies that hold Bitcoin in their treasury. New crypto treasury companies are being created almost daily now. Not confined to Bitcoin, mind you, but also accumulating Ethereum, Solana, and a growing number of other minor altcoins such as Tron (TRX), Binance (BNB), Hyperliquid (HYPE), and Litecoin (LTC) .
Nevertheless, Bitcoin DATs still dominate the field. As reported on Cointelegraph, Blockware Intelligence in their Q3 2025 market update, predicts that at least 36 more public companies will have added Bitcoin to their balance sheets by the end of 2025. “The corporate Bitcoin adoption race is mostly being spearheaded by brand new companies or dying companies you’ve never heard of”. According to Blockware, that’s not necessarily a disadvantage. “Companies with struggling core businesses (low growth, dying markets) have a much easier time recognizing the simplicity of investing retained earnings into BTC and earning 40–60% CAGR without the operational risks of running a business.” Glassnode’s lead analyst, James Check, is skeptical: “I suspect many (arguably most) Treasury Companies will suffer the same fate as the shitcoin complex in the fullness of time. A few will survive, but most are probably destined to under-perform spot Bitcoin.” Joakim Book of Bitcoin Magazine goes further and asks whether Bitcoin treasury companies are even Ponzi schemes. After all, how can a Bitcoin wrapped in a corporate charter suddenly be worth double, triple or ten times the most liquid, observable and obviously indisputable price on the planet? Specifically, he states, “Financial machines of perpetual motion don’t work, but bitcoin treasury companies are certainly trying. Why would this fad be any different?” Why should it indeed? In fact, we expect it to pop perhaps ushering in the next crypto bear market.
In an interesting move, Kazakhstan is considering investing its state assets in cryptocurrencies. This was recently stated by the head of the country’s national bank at a press conference. Kazakhstan holds a significant position in the world of cryptocurrencies and controls around 13% of the global Bitcoin hashrate. Timur Suleimenov, the head of the National Bank of Kazakhstan, explained: “We have an alternative portfolio of gold and foreign exchange reserves and an alternative portfolio of the National Fund. There we use aggressive strategies to achieve higher returns on capital. We have looked at the experience of the Norwegian fund, the American experience and the experience of the Middle East funds. They have certain investments either directly in cryptocurrencies or in ETFs and shares of companies that are closely linked to cryptocurrencies.” The planned cryptocurrency reserve is to be funded by confiscated digital assets and coins mined by state-backed companies. Kazakhstan intends to manage this new reserve via a dedicated subsidiary, which will ensure centralized custody, transparent accounting and risk control — at least that is the plan.
Turning to the tokenized real-world assets (RWA) market. In total there are currently $24.91 billion in assets tokenized. Private loans lead the way with $15.45 billion, followed by US treasury debt with $6.67 billion and commodities with $1.85 billion. In second place right after Paxos Gold comes Tether Gold. Tether CEO Paolo Ardoino has just confirmed that there are almost 250,000 Tether Gold (XAU₮) tokens in circulation as of Q2 2025. Each token is backed 1:1 by one troy ounce of physical gold, which corresponds to a total of more than 7.66 tons of gold.
Tokenized stocks are currently in the spotlight — they are being hailed as the next big on-chain asset with real utility and mainstream appeal. But despite the huge interest, these instruments are still in their infancy, with clunky infrastructure, regulatory overhang and a long way to go before they can truly compete with TradFi offerings.
The main issue seems to be that with many tokenized stocks, holders don’t get actual ownership of the asset they buy. Instead, they receive on-chain promissory bills that give them the ability to exchange tokens for the monetary value (stablecoins or cash) they hold. Unlike traditional share ownership through a registered broker, the convoluted legal wrappers used to create tokenized shares also deprive holders of important rights, such as direct claims to company assets and the ability to vote with their shares. Compared to digital assets, users of tokenized stocks are entirely dependent on the solvency of a central custodian to redeem their claims for monetary value.
Mike Silagadze of Ether.Fi offers a solution. As reported by bankless, Mike Silagadze proposes the creation of digitally native bearer shares that allow startups to circumvent regulations by listing directly on-chain with tokens that act as pseudo-shares — rather than creating inferior copies of TradFi shares that are dependent on trusted custodians. The problem is that these permissionless bearer shares (also known as unregistered share offerings) will almost certainly fall foul of regulators.
Opening Bell’s digital asset manager Superstate (his/her/their X-handle) offers a compliant alternative to pseudo-shares. With Opening Bell, companies may gain access to on-chain capital by issuing their shares directly on Solana or Ethereum, using tokens that have built-in compliance mechanisms such as permission lists and programmatic transfer restrictions. “With Opening Bell, companies can issue SEC-registered shares directly on the blockchain. Investors can buy and trade these shares like any crypto token, but they are real shares tied to real companies.” Despite Opening Bell’s strengths in terms of regulatory compliance, the private label model carries significant fragmentation risks. Regardless of whether a stock is ported from TradFi or listed natively onchain, liquidity can fragment across blockchains, between centralized and decentralized trading venues, or between competing tokens. Buyers also face additional friction, such as mandatory KYC through Superstate, which limits access and slows adoption. The successful generation of equity tokens will not split their liquidity across different private label issuers. Tokenized equities are still at an early stage of development, but the current obstacles suggest that a single blockchain with uniform issuance standards and a compliant issuance system will dominate the sector.
The World of Commodities
The top three commodities in the first six months of 2025 were Rhodium (+50%), Platinum (+49%), followed by Di-ammonium (+40%). The bottom three start with Potatoes (-67%), followed by Orange Juice (-53%) and Cocoa (-27%).
Copper experienced a sharp downturn at the end of July reversing the strong 2025 down to just 8.5% in price appreciation. What happened? The main reason seems to be a tariff exemption of refined copper (cathodes) from a 50% import tariff proclaimed by President Trump on July 30, 2025. This led to a sharp correction as traders had expected higher prices due to the tariffs, leading to a premium build-up that collapsed when the exemption was clarified. The second rerason seems to be oversupply due to front-loading as the anticipation of tariffs led to a massive influx of copper imports into the U.S., with 400,000 tons of “extra” copper stockpiled in early 2025. This “front-loading” led to a temporary oversupply which, in conjunction with the tariff exemption, reduced demand for new imports and pushed prices down.
The second outlier to the downside was natural gas. It’s a bit strange that gas prices have been so weak (-14.5% year-to-date) given the announced new demand from AI data centers and LNG exports. Let’s try to understand what’s happening here. According to industry experts, there are three reasons: First, there is an oversupply of natural gas in the US, where inventories are well above the five-year average and will be 7% above the 2020–2024 average in June 2025. Secondly, the mild weather is having an impact on demand. Finally, dry natural gas production in the US remained high, averaging 106.9 Bcf/d at the end of July, slightly above the previous week’s level. Continued production, particularly in the Permian Basin, ensures ample supply and put further pressure on prices. There therefore appears to be plenty of gas around. At least for now. After all, data hypercenters are reported to require some 28% of the entire U.S. power supply (up from 8.9% now) by 2030. “Exponential growth is a silent force; it starts small, but its appetite grows voracious, reshaping the world in ways linear minds struggle to grasp” — Ray Kurzweil in The Singularity is near (2005).
Due to recent geopolitical developments, let’s now take a closer look at what keeps the tech machine rolling: rare earths. After all, China has opened its supply supremacy spigots again — in return for the US re-allowing NVIDIA et al to ship their most powerful semiconductors to Zhongguo — the Middle Kingdom again. This is great news for both the consumers of rare earth metal magnets and the exporters of AI chips. It strongly suggests that the thaw in US/China relations is developing into something beyond short-term gestures.
Industry analyst Jack Lifton estimates that if the US automotive industry were to fully transition to electric cars and thus produce 10 million EV cars annually (10.4 million cars were produced cars in the US in 2024), it would require about 40,000 tons of rare earth permanent magnets per year. And EVs are only part of the equation. Rare earths are also essential to critical technologies like high-efficiency motors, rocket guidance systems, wind energy and even everyday items like smartphones and hard drives. If demand is a certainty, then availability deserves a closer look.
The term “rare earth elements” is actually a misnomer. These elements — comprising the 15 lanthanides as well as scandium and yttrium — are relatively common in the earth’s crust. Elon Musk recently pointed this out on X, noting that the challenge is not scarcity, but access and processing. Cerium, for example, is the 25th most abundant element with a crustal concentration of 68 parts per million — more than copper. Even the least abundant REEs, such as thulium, are present at about 0.5 parts per million. But what Musk wrote was a gross oversimplification of the challenge. The “rarity” of these elements is due to the fact that they are widely dispersed and seldom form concentrated deposits that can be economically mined. To extract and refine rare earths, huge quantities of ore must be processed — a costly, complex and very dirty undertaking. Here, China has pursued a strategy of the long game. Since Deng Xiaoping’s declaration in 1992 — “The Middle East has oil, China has rare earths” — the country has systematically expanded its supremacy in the entire value chain. In fact, China dominates the global market for rare earths, as it produces around 70% of the world’s rare earths and has almost 90% of the refining capacity. This includes an estimated 210,000 metric tons of rare earth oxides mined annually
Moving on to oil. The US Baker Hughes Rig Count measures the number of active drilling rigs. At the last release, there were only 410 oil and 124 gas rigs operating in the US — the fewest since October 2021, when the economy was still feeling the effects of COVID-19 shutdowns. Today, with prices trending downward, companies are halting drilling and waiting for prices to rebound before resuming production. According to the latest Commitment of Traders Report (COT), traders are more negative on oil than they have been for 12 years. Despite this, the US produced 13.2 million barrels per day of oil last year. This is an increase of 164 % compared to the low of 5.0 million bpd in 2008. The trend is continuing upwards. According to the US Energy Information Administration (EIA), US oil production will rise again to 13.4 million barrels per day by 2025 — even at lower prices. However, after prices reach extreme mood swings, they usually revert to the mean. On June 11, the day the trade agreement between the US and China was announced, oil prices rose by 4.5%. After all, avoiding a trade war is good for global growth. A strong economy means more demand for oil — and that drives up prices. Nevertheless, there are many factors and variables that influence the price of oil. The world’s largest producer, Saudi Arabia, wants prices to remain at least close to current levels, if not fall further, in order to squeeze out marginal producers.
There was a significant development in the gold market that deserves highlighting: On 1 July 2025, gold became recognized as a reserve currency for banks under the Basel III regulations, which boosts the outlook for precious metals. With the price of gold already near all-time highs, this move is seen as another potential challenge to the global dominance of the US dollar, especially as countries such as China reduce their holdings of US bonds. A reduction that can easily be swallowed up by stablecoins though (please see above for more detail). Anyhow, analysts believe this could lead to further investment in gold and silver and change the dynamics of commodity markets in a geopolitically uncertain world. After all, “gold is money, everything else is credit” — J.P. Morgan.
The Rest …
The largest tax bill in history — the One Big Beautiful Bill Act (OBBBA) — was passed by the US Congress in July. Nick Rokke has analyzed the $12.5 trillion worth of tax provisions provided in the bill. “In effect, the federal government is now utilizing the tax code to reshape global capital flows, re-industrialize the United States and win the race for artificial intelligence”. Let’s take a closer look, forget the political arguments for a moment, and just follow the money. The Cold War was won with nuclear weapons and currencies. The next global competition will be decided by data centers, semiconductor manufacturing and energy production. And the OBBBA has just given American companies the financial firepower to outgrow, outspend and outperform their global competitors.
The OBBBA is a 330-page law and tax code. But behind the jargon lies a single, powerful lever — accelerated depreciation. Depreciation determines how quickly a company can write off the cost of its investments. Under the old rules, capital goods were depreciated slowly, over decades. Under the new law, companies can now write off 100% of the cost of qualifying production assets immediately — this can be anything from factories to oil pipelines and drug research to AI hardware. This reshoring super deduction drastically reduces the after-tax cost of domestic investment. This should significantly encourage the onshoring of supply chains and production capacity.
Another important change is that companies will be able to deduct 100% of their research and development (R&D) costs. Previously, companies had to write off their R&D expenditure over five years — a major setback for innovation-oriented companies. This was basically a tax on innovation. This burden has now been removed, and innovators can now deduct their research costs in full. It’s no coincidence that the biggest companies spend huge sums to secure top AI talent (Meta & Scale AI, Google & Windsurf…). Now they can write off those expenses immediately. Don’t get me wrong, the OBBBA is not perfect. But it is clear on one point. America is open for business — especially in high-tech manufacturing and AI. Last year, $240 billion was spent on expanding AI infrastructure. That figure is expected to more than quadruple, reaching $1 trillion annually by 2028. Mind-blowing.
Moving on to recent developments at US banks. Are banks on the brink of a new golden age? Profits at Goldman Sachs and Morgan Stanley have benefited significantly from the flood of tariffs and resulting volatility that have hit the markets in recent months. Meanwhile, the scaffolding of regulations put in place after the Global Financial Crisis (GFC) is beginning to crumble. The Fed decided last month to lower reserve requirements. This increases the leverage available to banks and encourages lending. Increasing the volume of lending and making it easier to lend is a recipe for a boom in the financial sector. Add to this the prospect of lower interest rates and banks could be off to the races.
The retail stock investment mania seems to be in full swing again. According to the New York Stock Exchange and Citi, retail investors now account for about 14% of all single stock trading — the highest level since 2018, surpassing even the 12% peak from 2021 when meme stocks were trading (remember GameStop, Hertz and even Bed Bath & Beyond). That’s already a dubious sign for the market. However, exasperating the situation, they mostly buy low-quality stocks. The Goldman Sachs Non-Profitable Technology Index has skyrocketed as markets have returned to all-time highs. Since its low in April, this index has risen by 66%. That’s almost double the 35% rise of the Nasdaq 100 over the same period. Clearly, the Reddit gang is back and this time they’re going after DORKs (Dunkin Donuts, Opendoor, Rocket Companies and Kohl’s). This is worrying. In 2021, this behavior of retail investors marked the peak of the post-COVID bull market.
What about institutional investors though? According to the latest monthly Bank of America Global Fund Manager Survey, institutional investors only maintain a cash level of 3.9%. That’s the lowest figure for money managers’ cash position since 2021. Bank of America considers it a positive indicator when the cash ratio is 5% or more as such a level has historically marked a low in the markets. But when the cash position falls below 4%, as is the case today, the survey triggers a sell signal. Here are Warren Buffett: “Risk comes from not knowing what you’re doing” and Benjamin Franklin: “An investment in knowledge pays the best interest.” Then again, stock markets continue to hit new highs and the legendary hedge fund manager Stanley Druckenmiller once said that the best economist he knew was the stock market, so maybe that means we can rest easy?
MAKE-IT CAPITAL FUND (the Fund)
As a unique hedge fund for a comprehensive blockchain / cryptocurrency portfolio, the Fund allows investors to participate in the full spectrum of distributed ledger / crypto assets with just one investment.The Fund aims to reduce inherent risk and volatility without compromising performance by applying its proprietary 5-pillar strategy.The Fund is operated by Make-It Singapore and managed by Make-It New Zealand.The Fund is fully transparent and always trades at the exact NAV.
The Make-It Fund had another fantastic month (+19.39%), again leaving Bitcoin in the dust (+8.21%). Alt season seems to have arrived, ushering in a new crypto bull phase. For historical context, the 2017–2018 altcoin season was driven by the ICO (Initial Coin Offering) boom and resulted in Bitcoin’s dominance falling from 86% to 38%. It started around March 1, 2017 and lasted for about 310 days (roughly 10 months), peaking in early January 2018. During this time, the market capitalization of altcoins rose from $30 billion to over $600 billion. The next altcoin season came in 2020–2021, triggered by the rise of decentralized finance (DeFi) and non-fungible tokens (NFTs). This second alt season started around January 3, 2021, lasted about 309 days (i.e. also about 10 months) and ended around November 10, 2021. Bitcoin dominance dropped from 70% to 38%, and altcoins gained 174%. Are we in for another 9–10 months of crypto money making glory in the third iteration of the alt season?
Your Fund managers, Kenneth, Dominik, and I cannot help but remain incredibly optimistic of what is yet to come to our markets. And we are clearly not alone in this assessment. According to Fabian Dori, CIO of Sygnum Bank, Bitcoin is becoming a programmable collateral and a tool for optimizing capital strategy. Institutions that recognize this shift will set the pace for the next decade of finance. When Bitcoin is understood as infrastructure and not just an asset, it positions investors for a system in which value-enhancing collateral offers benefits that traditional assets cannot match. “Bitcoin has transformed from a speculative asset into a programmable infrastructure — a tool for revenue generation, collateral management, and macro hedging”. The next wave of financial innovation will not only utilize Bitcoin, but build upon it. As mentioned earlier, the corporate and governmental Bitcoin balance sheet strategy, spot ETFs, and the regulated adoption of stablecoins, could do for the 2030s what the Eurodollar did for global liquidity in the 1960s. Quite simply, we are at the dawn of a new financial system.
There is so much to look forward to.
Thank you for your time and attention.
Sincerely,
Philipp L.P. von Gottberg
Make-it Capital Edition #50 was originally published in Coinmonks on Medium, where people are continuing the conversation by highlighting and responding to this story.