Q2 2025

  • Woodstock Fund

    • Stablecoins Update

    Since our last note, stablecoins have entered a new phase—out of regulatory ambiguity and into real-world deployment. The current stablecoin supply stands at just under $250 billion (RWA.xyz). But, US Treasury Secretary Scott Bessent’s comment during the June Senate hearing gives us a target for what is to come. Bessent believes that the US dollar-backed stablecoin market has the potential to surpass $2 trillion by 2028. Furthermore, the past few weeks have marked a decisive shift, driven by major policy breakthroughs and accelerated integration by fintech incumbents.

    GENIUS Act Passes Senate

    On June 18, in a 68–30 vote, the US Senate passed the GENIUS Act to regulate stablecoins, which aims to solidify U.S. dollar dominance, requiring stablecoins to be fully backed by dollars or similarly liquid assets, mandating annual audits for issuers with market caps of more than $50 billion, and establishing guidelines for foreign issuance. Stablecoin holders would receive “super-priority” in bankruptcy, and the legislation blocks non-financial tech giants such as Meta and Amazon from issuing stablecoins unless they meet strict risk and privacy standards. It was officially received in the House of Representatives on June 23, but was immediately “held at the desk,” meaning leadership is deliberating before moving ahead. The House is expected to pass before Q3 ends. 

    Regulatory clarity is triggering a second wave of institutional engagement.

    While USD-pegged tokens dominate the market, stablecoins pegged to EUR, GBP, JPY, SGD, and other currencies are also gaining traction. Multi-currency stablecoins are emerging to serve global markets more effectively.

    Circle has an Edge

    Circle (NYSE: CRCL) went public on June 5, 2025, pricing at $31/share and raising approximately $1.05 billion, a debut met with fervent investor demand as shares rocketed ~168% intraday and rallied over 600% from the IPO price in the weeks that followed. This blockbuster performance has triggered what analysts are calling a crypto IPO renaissance, with firms like Gemini, Bullish, OKX, Kraken, and TRON now preparing confidential filings or strategic preparations to follow suit, buoyed by a friendlier regulatory climate.

    Anticipating the new regime, Circle applied to launch the “First National Digital Currency Bank,” a federally chartered institution designed to manage USDC reserves and offer institutional custody services. Their positioning aligns directly with GENIUS Act requirements and signals long-term durability.

    Meanwhile, Tether (USDT), still the market leader, may face mounting pressure as regulators scrutinize its offshore structure and reserve composition.

    Real Payment Rails are Live

    TradFi is Embracing Stablecoins

    BlackRock’s BUIDL, a tokenized Treasury fund, has ballooned from $680 million in March 2025 to $2.8 billion in AUM (4x growth), while Fidelity’s FUSDC offers yield-bearing stablecoins tied to money-market funds. The message is clear: TradFi is embracing stablecoins not as a speculative tool, but as a more efficient way to move and store value.

    Stablecoins are no longer just crypto-native liquidity tools—they’re now embedded in the stack of global fintech. Policy clarity, payment scale, and enterprise adoption are converging to make this one of the most investable narratives in digital finance today.

    Crypto Treasury Companies (CTCs)

    Are CTCs the new meta to look forward to, or a slow build-up of systematic risk?

    Bitcoin has long been the asset of choice for institutions seeking crypto exposure. As of today, over 256 entities collectively hold 3.47 million BTC (around 16.5% of the total supply) on their balance sheets. ETFs lead the way, with public companies and various governments following suit (mostly because of seized BTC).

    Source: Pantera Capital

    CTCs primarily raise funds through:

    1. Equity offerings, either Private Investment in Public Equity (PIPE) or at-the-market (ATM) offerings, which are both dilutive. ATMs are preferred when trading above NAV to capitalize on premiums. 
    2. Convertible bonds (CBs) are popular due to crypto volatility, which boosts the value of embedded call options and enables capital raises at higher conversion prices. Convertible preferred shares offer a similar upside without the repayment obligation of CBs. 
    3. Straight debt has fallen out of favor due to the risk of liquidation associated with collateralized crypto.

    MicroStrategy (now rebranded to Strategy) (MSTR) has pioneered this model of raising cheap capital via various funding instruments and using the proceeds to purchase Bitcoin. This interest fuels a familiar flywheel: more exposure begets more trading volume, which enables capital raises and allows for the purchase of even more Bitcoin.

    Now, we have new players emerging that are running the same playbook with assets other than Bitcoin. Other public companies are mimicking this approach:

    The rise in CTCs is creating leveraged risk in the system over time, with high stakes. Think 2022, with Terra, Celsius, 3AC, and others, but not yet as sinister. 

    1. Capital Structure Fragility – While Microstrategy’s early converts were largely unsecured and cheap, new entrants face tighter credit conditions, worse terms, and possibly secured debt. A report by Presto Research shows that among $44 billion raised or pending by 12 treasury firms, only a third is debt-financed, and 87% of that is unsecured. That limits systemic liquidation risk for now, but discipline must be maintained.
    2. Forced Asset Sales – As Peter Chung of Presto notes, companies may still be forced to liquidate crypto: “In unforeseen circumstances requiring urgent cash, with no alternative funding sources, crypto treasury companies may resort to liquidating crypto assets.”
    3. Activist Risk – If these stocks trade below NAV, activist investors may attempt to force asset sales. Chung explains: “Activists typically prefer less drastic tactics… but liquidation becomes a viable path if NAV gaps persist.”

    CTCs offer a new avenue for investors seeking asymmetric upside through public markets. But unlike ETFs, these vehicles combine financial engineering, operational execution, and crypto price action, and failure in any component can trigger reflexive loops of capital loss. As more companies attempt to follow the Microstrategy playbook, investors must be more discerning than ever about financial engineering and marketing.

    Project Spotlight

    Camp Network

    AI is rapidly transforming the digital landscape, but it poses a critical challenge: content is increasingly being scraped and used without the creator’s consent, eroding ownership, control, and compensation. As AI-generated content and autonomous agents proliferate, creators face an existential threat. The true value of AI will increasingly lie in unique, user-owned IP and the agents fine-tuned on it, making provenance and enforceable rights the foundation for a sustainable AI-driven internet.

    Camp Network tackles this head-on with a purpose-built Layer 1 blockchain designed to register and tokenize IP onchain, enable transparent royalty distribution, and support AI agent deployment. At the core is its novel Proof of Provenance protocol, which ensures every piece of IP has a verifiable origin, usage rights, and attribution. With native support for agent workflows and gasless royalty mechanisms, Camp allows developers to launch dedicated app chains and build AI experiences with structured, rewardable training data, turning user contributions into verifiable, monetizable assets.

    Camp’s long-term vision is to become the largest repository of user-owned IP and the leading marketplace for rights-cleared training data. Instead of fighting AI with litigation or locking down creativity, Camp takes a Spotify-like approach: make doing the right thing easier than piracy. For creators, it offers transparent monetization and attribution; for developers, a legal, scalable way to build on high-quality content.

    Camp recently announced a $30M raise, including its Series A co-led by 1kx and Blockchain Capital, with backing from dao5, Lattice, OKX, and others. The funds will support scaling its network, expanding its ecosystem, and accelerating adoption across media and AI. Try the testnet at testnet.campnetwork.xyz to learn more.

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    Warm Regards,

    Woodstock Team

    Disclaimer and Risk warning:
    Every financial product, asset class, or investment has a risk. A digital asset (also known as digital tokens, digital coins, or crypto(s)) is no different. That is why the readers need to be aware of the potential risks present in digital assets and blockchain projects. You should not invest funds in the digital assets market that you are not prepared to completely lose; i.e., only allocate risk capital to digital tokens. Woodstock Funds may or may not hold investments in projects we talk about in our newsletters or blog posts. The newsletters and blog posts are for information purposes only and should not be considered any form of investment, financial, or legal advice. Furthermore, we will not accept liability for any loss or damage that may arise directly or indirectly from any content covered in our newsletters and blog posts.

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