Reading · Deal Flow Digest

Gm!

Welcome to the May Deal Flow Digest, your snapshot of every crypto / web3 funding round we tracked last month, plus some macro context shaping June’s term sheets.

May was filled with more public companies buying Bitcoin (and other crypto). This was started by Michael Saylor at MicroStrategy, who has bought $40B worth of BTC since he started in 2020. I wrote about these “MicroStrategy-style” strategies in last months’ newsletter, so instead this month we get a bit more dystopian with markets and macro given the tone change with DOGE.

At the bottom, be sure to check out the sheet below with ALL the deals, and the recent hackathon/demo day results (in the links).

“Fiscal responsibility”? “Austerity”?

That dream is over. Boomers will not surrender entitlements, and no political party has the stomach to slash spending.

The tune has changed over the last month and we’ve seemingly abandoned / buried the DOGE deficit reduction plan and moved on…

When debt was low, the Fed could tweak rates and declare victory. However, federal net interest hit 3.1% of-GDP this quarter. We’ve passed the point where higher rates fix anything; they just light the fuse faster.

Now the U.S. carries $36 trn in federal debt—or $175 trn once you count unfunded promises.¹ With fewer workers and more retirees, debt + demographics > Fed tweaks.

Welcome to fiscal dominance. Welcome to the debt death spiral.

Pitchforks and torches? How do we get out of this precarious situation we find ourselves in?

Cutting spending won’t work. So the way I see it we have 5 options:

Hike taxes massively
Translation: Soak the productive class.
Reality: Political suicide note.
Slash entitlements
Translation: Touch Social Security and Medicare.
Reality: Double suicide note, no party survives it.
Inflate the debt away
Translation: Permanent money-printer go brrr.
Reality: Stealth tax on savers; already happening, but accelerates (rapidly).
Grow GDP via tech
Translation: AI copilots, humanoid robots, abundant energy.
Reality: Needs an exponential productivity boom, but it’s the most optimistic path.
Default / restructure
Translation: Hard reset on Treasury and entitlement promises.
Reality: Nukes pensions, insurers, and banks…politically framed as “un-American,” yet always lurking in the background.

Yes, there are additional options but I think they nestle under these 5 options. Privatize government assets, e.g. sell federal land, spectrum, postal real estate, or the TVA to raise cash, this will barely move the needle.

Let’s dig in to 3 / 4 / 5 and how they’d impact investment decisions.

This is already happening: M2 is up ~40 % since 2020. As our debt payments increase and we enter a debt spiral, this accelerates. Quickly.

Monetizing deficits is a stealth tax on savers as dollar purchasing power erodes. This fuels financial nihilism as the wealth gap widens; political rage simmers.

The more optimistic path. But honestly productivity has to go parabolic. Some viable paths include:

AI copilots that 10× white-collar output
Humanoid robots that 10× blue-collar output
Cheap, abundant energy (fusion, next-gen solar)

If we accelerate fast enough, our mountain of debt begins to look a lot less of a worry. Energy is a whole other discussion with China’s energy production v. USA….

A very bad option for everyone. This would look like a blunt restructuring that would vaporize pensions, insurers, and foreign creditors overnight.

There are some other flavors that also look bad:

Financial repression 2.0: force banks & savers into bonds that yield below inflation.
One-off wealth grabs: special levies, “patriotic” bond conversions, retirement-account nationalizations.
CBDC: swap out Treasuries for digital reserves, then quietly mark them to zero.

All rhyme with default; none are advertised as such.

While policymakers juggle #3, pray for #4, and fear #5, markets have slipped into end-stage fiat theater: “Please ser, give me volatility. I can’t make it any other way.”

Many young people, facing rising costs of living, student debt, and unattainable homeownership, turn to gambling as a high-risk, high-reward escape. E.g., the 200% increase in online gambling spending since 2019 and the popularity of parlay bets (which offer high payouts but lower odds) are cited as examples of this trend. These behaviors reflect a "swing for the fences" mentality, where individuals feel they have little to lose in a system they perceive as unfair.

Clicks beat cash flow; dopamine beats dividends. This is not investing…it’s survival.

A classic for some time amongst crypto circles, “The Fourth Turning” by Strauss & Howe predicted a generational crisis in the late 2020s. It’s looking more and more plausible, checking all their boxes:

Institutional distrust ✅
Unsustainable promises ✅
Search for scapegoats ✅
Tech upheaval ✅

It’s feeling eerily similar. If history rhymes, we’ll reboot. And the reboot will happen, either painfully or productively.

Ok what does it all mean. Clearly a biased take but the options seem to be:

Focus on Preservation, you allocate to Crypto Assets (harder to confiscate), and other Hard Assets (Gold, Real Estate, Fine Art - note that all of which are easier to confiscate).
Barbell that with a focus on Acceleration, allocating to AI and energy picks & shovels.

Everything in the mushy middle, e.g. long bonds, index trackers, idle cash - melts.

Ugly, yes. Uncharted waters, also yes. Good luck out there.

If you enjoyed this, please share with someone still hoping for balanced budgets, would love to hear their pushback.

Now on to the rest of the crypto / web3 fundraising :)

Twenty One | Undisclosed | CeFi | $100M | 2025-05-28
Bitcoin BTC treasury firm Twenty One raised an additional $100M through convertible senior secured notes as it moves toward a planned merger with Cantor Equity Partners. Backers include Tether, Bitfinex, and SoftBank.

Conduit | Series A | DeFi | $36M | 2025-05-27
Conduit, a stablecoin-powered cross-border payments company, raised $36M in a Series A round backed by Dragonfly, Altos Ventures, DCG, and others.

Doppel | Series B | Others | $35M | 2025-05-01
Doppel, an AI-powered social engineering defense platform, raised $35M at a $205M valuation in a Series B led by Bessemer. Investors include a16z, 9Yards, and Sozo Ventures.

Metaplanet | Debt Financing | CeFi | $21.25M | 2025-05-08
Tokyo-listed Metaplanet raised $21.25M through debt financing to further its strategic transformation using Bitcoin as a treasury reserve asset.

Catena Labs | Seed | Web3 | $18M | 2025-05-19
Catena Labs, building AI-native Web3 infrastructure, raised $18M in a seed round led by a16z crypto, with participation from Coinbase Ventures, Breyer Capital, and others.

Roxom | Undisclosed | DeFi | $17.9M | 2025-05-21
Roxom, a Bitcoin-native platform for global asset trading, raised $17.9M in an undisclosed round backed by Borderless Capital, Draper Associates, and Kingsway Capital.

T-REX | Undisclosed | Infrastructure | $17M | 2025-05-07
Web3 consumer entertainment platform T-REX raised $17M in pre-seed funding. Investors include Framework Ventures, Portal Ventures, and North Island Ventures.

Openverse Global | Strategic | Infrastructure | $11M | 2025-05-11
Openverse Global, a Layer0 cross-chain infrastructure network, raised $11M in a strategic round led by DuckDAO, Castrum Capital, and Asva Capital.

True Markets | Series A | DeFi | $11M | 2025-05-19
True Markets, a non-custodial, stablecoin-native exchange, raised $11M in Series A funding co-led by Accomplice and RRE Ventures.

Perpl | Undisclosed | DeFi | $9.25M | 2025-05-12
Perpl, a native pricing engine on Monad, raised $9.25M in an undisclosed round backed by Dragonfly Capital, CMS Holdings, and Breed VC.

VCs are continuing to announce their new raises.

2025-04-30: Re7 Capital launches $10 million SocialFi fund to invest in ~30 early-stage SocialFi startups across ecosystems like Lens and Farcaster.
2025-05-01: dao5 closes $222 million second fund led by Polychain alum Tekin Salimi. Backed startups from the first fund include Berachain and Bittensor.
2025-05-14: Pi Network launches $100 million Pi Network Ventures fund to support startups in AI, fintech, embedded payments, and e-commerce that enhance the Pi ecosystem.
2025-05-15: A100x nears $25 million second fund close with a target of $50 million, focused on early-stage blockchain and AI startups.
2025-05-21: Theta Capital secures over $175 million for crypto fund investments via a fund-of-funds strategy backing institutional crypto vehicles.
2025-05-28: Metalayer Ventures launches $25 million Metalayer Fund I to invest in blockchain infrastructure and real-world assets. Early investments include Ethena, Crossover Markets, and AnchorZero.
2025-05-29: Blockchain Builders Fund I closes $28 million debut fund focused on early-stage crypto startups, especially from the Stanford blockchain ecosystem. Portfolio includes 0G, Nexus Labs, and Hyperbolic.