KCV Weekly Report 20250602-0608
2025/06/10 02:01:29
KuCoin Ventures Weekly Report: Trump-Musk Clash Roils Markets, Circle IPO Shines, as ETH Treasuries & Pump.fun Heat Up
1. Weekly Market Highlights
Escalating Clash Between Tech Giants and Political Power: The Trump-Musk Confrontation and Its Market Impact
This week, the public conflict between Donald Trump and Elon Musk escalated further, bringing the intricate interplay between tech giants and state policy power to the forefront. The trigger for the event was Musk's strong opposition to Trump's proposed "One Big Beautiful Bill Act." This comprehensive legislative plan covers government budgets, tax systems, debt management, and environmental policies. It promises to extend the 2017 Trump administration's tax cuts, increase defense spending, and fund mass deportations of undocumented immigrants, and is seen as a key tool for Trump to advance his core policy agenda if re-elected. Musk pointed out that this bill could exacerbate fiscal deficit risks.
In response, Trump swiftly retaliated, criticizing Musk and threatening to cancel federal contracts with SpaceX and X (formerly Twitter), even hinting at cutting subsidies enjoyed by Musk's companies. Musk, in turn, fired back, accusing Trump on social media of connections to the Epstein case and, in a rare move, publicly calling for his impeachment.
The rapid escalation of the situation has put regulatory agencies on high alert. According to Reuters, multiple agencies, including the U.S. Federal Communications Commission (FCC), are re-examining the compliance and regulatory boundaries of Musk's enterprises. NASA and the Pentagon have also reportedly developed contingency plans for potential contract risks. A war of words initially ignited on social media is now evolving into substantive policy and regulatory repercussions.
The market's reaction has been swift and divided. A recent YouGov poll indicated that while most of the public showed limited interest in the dispute between these two highly influential figures, capital markets reacted quickly. Tesla's stock price once fell by nearly 14% during the peak of the conflict, with its market capitalization evaporating by over $150 billion in a single day, clearly reflecting the market's high sensitivity to policy intervention and corporate compliance risks.
Although Trump publicly stated he has "no intention of mending relations," some media outlets reported that aides from both sides are attempting to de-escalate the situation, with Trump's advisors privately signaling a desire to "cool things down quickly," suggesting this power struggle may not be entirely irreconcilable. This incident starkly reveals a new vulnerability between tech companies and state power structures in the current highly politicized cycle: once existing cooperative agreements are undermined by policy disagreements, companies are rapidly exposed to scrutiny and uncertainty, and market risk appetite tightens accordingly.
In the short to medium term, if the conflict between the two sides can be quickly resolved, risk asset sectors such as technology and aerospace may stabilize and recover, and overall market risk premiums could decline. However, if the Trump side continues to strengthen its regulatory stance or advance related restrictive policy measures, core enterprises like SpaceX, X, and Tesla could face multiple uncertainties including contract freezes, subsidy withdrawals, and stricter regulatory reviews. This is not merely a celebrity clash but a real-world test of tech giants' ability to protect themselves in a complex policy environment. It also serves as a reminder to re-examine the potential risks and resilience of related tech capital, including the crypto market, within the current institutional cycle.
"Trump IP" Crypto Governance Dilemma: WLFI and "Trump Wallet" Controversy Exposes Deep-Seated Risks
This week, another focal point of market attention was the controversy surrounding the ownership of World Liberty Financial (WLFI), a crypto project associated with the Trump family, and the "Trump Wallet." This dispute has exposed deep-seated contradictions within the project's governance structure and the family's IP licensing mechanisms.
The incident began when Fight Fight Fight LLC (the company behind $TRUMP) and Magic Eden jointly announced the launch of an airdrop event for a "Trump Wallet," setting up a registration portal on their official website to guide users. This move was initially perceived by some market participants as an officially endorsed project by the Trump family, leading to a significant short-term surge in the $ME token price. However, several core members of WLFI, including Trump's three scions—Donald Trump Jr., Eric Trump, and Barron Trump—subsequently clarified on social media that the "Trump Wallet" was not an officially family-endorsed project. They stated that the genuine official Trump wallet product is being developed internally by the WLFI team and is expected to be launched under the native brand identity.
Just as the market anticipated a further escalation of the conflict, Eric Trump posted a day later, announcing that the MEME coin $TRUMP had reached a cooperation agreement with WLFI. Although their original wallet project would not proceed, they would still focus on building "the world's most exciting MEME - Trump." This series of flip-flopping statements highlights the instability of the internal governance system within the Trump-related crypto business ecosystem. On the one hand, different internal members clearly have not reached a consensus on project promotion pace, brand licensing, and commercial interest distribution. On the other hand, partners launched products without obtaining full authorization, creating a fait accompli. This has not only caused confusion in the market regarding the usage rights of "Trump IP" but has also exposed WLFI to legal and compliance risks related to brand extension.
Currently, the expansion of "Trump IP" in the crypto domain faces three core challenges:
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Unclear Governance Structure with Ambiguous Responsibilities: Lack of a unified brand licensing pathway and clear internal decision-making and execution mechanisms.
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Strategic Misalignment Between Project Promoters and Partners: Multiple parties acting independently, leading to inconsistent narratives and chaotic project pacing.
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User Cognitive Dissonance and Trust Risk: The coexistence of multiple "official" product versions or statements makes it difficult for the market to determine authenticity, thereby affecting user confidence and brand reputation.
Against this backdrop, the Trump family's crypto business, represented by WLFI, is further under the spotlight. According to public information, the Trump family directly or indirectly controls approximately 60% of WLFI's shares and holds dominant control over the issuance of the stablecoin USD1. With more products planned for launch, how to balance leveraging traffic and brand effects while ensuring compliant operations and establishing a robust governance structure has become key to its successful progression to the next stage of development.
2. Weekly Selected Market Signals
Musk and Trump’s relationship has fractured, causing significant BTC volatility; ETH ETF sees first consecutive four-week net inflows this year
The rift between Musk and Trump stems from disagreements over Trump’s signature tax and spending bill, escalating last week into a public social media feud, triggering sharp global market fluctuations, with BTC briefly dipping near the $100,000 mark. On June 5, BTC liquidations reached $965 million in a single day, the highest since February, with $876 million in long positions liquidated.
Data Source: https://trade.rails.xyz/trade/BTC-USD
BTC ETF has seen slight outflows for two consecutive weeks, while ETH ETF has maintained positive inflows for four straight weeks, the first time this year, with net inflows ranging between approximately $250 million and $300 million over the past three weeks.
Data Source: https://sosovalue.com/assets/etf/us-eth-spot
This week’s key macroeconomic events focus on China and the U.S.:
June 9, 9:30 AM: China May CPI Year-over-Year June 10: China May M2 Money Supply Year-over-Year June 11, 8:30 PM: U.S. May Seasonally Adjusted CPI Year-over-Year June 12, 8:30 PM: U.S. Initial Jobless Claims for the Week Ending June 7 & U.S. May PPI Year-over-Year June 13, 12:00 AM: Federal Reserve Releases U.S. Quarterly Financial Accounts Report
The potential purchasing power of users on meme trading platforms supports a structural market rally but not a broad-based surge. Leading meme players are still waiting for opportunities, poised to act strategically
The potential purchasing power of Solana meme trading platforms (monthly Traders’ balance) reached 498k SOL in May, the highest since January’s 756k SOL. This purchasing power has maintained a growth trend for three consecutive months, enabling speculative players to quickly react and drive up individual coin market caps when the next major narrative hotspot emerges. However, daily potential purchasing power remains relatively subdued, with recent daily Traders’ SOL balances falling to less than half of what they were before TRUMP’s token issuance. Leading meme players are cautiously observing daily market movements, awaiting the next big hotspot. Additionally, Pump Fun’s token issuance warrants close attention. Raising $1 billion at a $4 billion FDV, its high-valuation, large-scale financing could rapidly drain liquidity in the short term. Pump Fun’s low loyalty to SOL for fee collection may further disrupt the growth trend of potential purchasing power.
Primary Market Financing Observations:
Data Source: https://cryptorank.io/funding-analytics
Last week, primary market financing totaled $1.77 billion, marking the fourth-highest weekly level this year and showing growth for three consecutive weeks. Major investments included Robinhood’s $200 million cash acquisition of crypto exchange Bitstamp and Consensys leading a $425 million financing round for SharpLink Gaming to create an ETH treasury. Other financings exceeding $10 million included Slow Ventures leading an investment in crypto trading platform Rails and DWF Labs investing in the public blockchain project IOST. Noteworthy deals also included KuCoin Ventures’ investment in Sui network’s veDEX Momentum and AllianceDAO’s investment in polycule, a Telegram Bot within the Polymarket ecosystem.
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Shifting from sports betting to buying and holding ETH, SharpLink Gaming secures funding and personnel support from ETH backers
SharpLink Gaming, a publicly listed sports betting company on the U.S. stock market, announced two weeks ago that it raised $425 million through a private placement to purchase 120k ETH (at an estimated average price of $3,541.67) to serve as the company’s primary treasury reserve asset, mirroring MicroStrategy’s strategy of holding BTC as a reserve asset. SharpLink received financial backing from Consensys, a key player in the Ethereum ecosystem, which led the funding round. Additionally, Ethereum co-founder Joseph Lubin has been appointed chairman of SharpLink’s board. It remains unclear what strategy SharpLink is employing to acquire the 120,000 ETH. Meanwhile, SharpLink’s stock price experienced a rollercoaster ride within a single week, surging from under $4 before the announcement to a peak of $124 in just a few days, before dropping to $40. SharpLink’s current market capitalization is $2.465 billion. If its stock price were pegged to ETH, ETH would need to reach approximately $20k. According to SharpLink’s Q1 2025 financial report, the company’s total assets are $2.778 million, with liabilities of $693,100 (a debt-to-asset ratio of 24.95%). Total revenue was $741,700, with a net loss of $974,900 after deducting operating costs and other expenses.
It is widely believed that SharpLink’s ETH treasury strategy will encourage more publicly listed companies to follow suit and purchase ETH. Additionally, SharpLink plans to utilize its ETH holdings in DeFi and staking to generate yields, with professional management provided by ParaFi and Galaxy.
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The first ve(3,3) DEX on the Sui network, Momentum briefly became DEX with the highest daily trading volume on Sui following the Cetus hack
Data Source: https://defillama.com/dexs/chain/sui
Momentum is a DEX launched on the Sui network in March this year, but its growth has been remarkably rapid, achieving a new high of $2.184 billion in trading volume and $1.8 million in fees in May. Following the Cetus hack, which led to a service suspension, Momentum, alongside Bluefin, took on the mantle of sustaining trading volume and liquidity on the Sui network. At one point, Momentum became DEX with the highest trading volume on the Sui network.
Momentum adopts the ve(3,3) operational model, which combines the veToken model with OlympusDAO’s (3,3) cooperative game theory. The core mechanism aligns the interests of multiple parties through voting and incentives: users lock MMT to obtain veMMT and voting rights, which determine liquidity allocation; LPs offer additional incentives to attract veMMT holders to vote for specific pools. This model ensures that trading fees and rewards flow to users, creating a flywheel effect—higher trading volume generates more fees, which in turn enhances liquidity. However, based on experiences with DEXs on other networks that use similar ve(3,3) models, there is a potential risk of voting power concentration, where large holders dominate, which could undermine and dilute the participation experience of retail users.
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Twitter has reached an official partnership with the prediction market platform Polymarket, with Polymarket’s unofficial Telegram bot, Polycule, securing investment from AllianceDAO in a flash
Last week, Twitter announced its official collaboration with Polymarket, designating Polymarket as Twitter’s official prediction market partner. Operating on the Polygon network, Polymarket is arguably the most successful and widely recognized crypto application, with its election predictions cited by major mainstream media outlets ahead of the U.S. presidential election featuring Donald Trump. The partnership between Twitter and Polymarket represents a true step toward mass adoption, bringing prediction markets to a social media platform with hundreds of millions of users. To some extent, it may encourage Web2 users to participate in on-chain activities using the stablecoin USDC. The upcoming inaugural FIFA Club World Cup this month and the globally influential FIFA World Cup next year could serve as significant catalysts for Polymarket following the election.
Due to Polymarket’s access restrictions in multiple regions, including the United States, and the absence of a dedicated app, the Telegram-based bot Polycule emerged to fill the gap. Following the official Twitter-Polymarket partnership, Polycule quickly announced it had secured $560k in funding from AllianceDAO. Polycule’s product model is similar to other Telegram bots like Banana Gun, but its focus is distinct, centering on trading within the Polymarket market. Notably, Polycule has already issued its own token, with a current market capitalization of approximately $10 million. The token includes a buyback and burn mechanism.
3. Project Spotlight
Crypto Market Capital Surges: Circle IPO's Strong Debut and Pump.fun's Anticipated High-Valuation Token Launch
Circle's IPO: A Strong Start, A Wave of US Crypto IPOs on the Horizon?
Recently, Circle (stock code: CRCL), the issuer of the world's second-largest US dollar-pegged stablecoin USDC, officially listed on the New York Stock Exchange on June 5th, attracting significant market attention. Since its establishment in 2013, Circle has successfully completed 8 funding rounds, raising a total of $1.111 billion.
Circle's IPO initially planned to offer 24 million shares with a price range of $24-$26. Due to strong investor demand, the final offering size was increased to 34 million shares, the price was raised to $31, raising a total of $1.054 billion, with the offering being oversubscribed more than 20 times.
Data Source: https://finance.yahoo.com/quote/CRCL/
On its first day of trading, Circle's stock performed strongly, with the opening price soaring to $69, a 122.58% increase from the issue price. It reached an intraday high of $103, marking a maximum gain of 234.68%, and trading was briefly halted due to high volatility. As of the US stock market close on the 6th, its share price was $107.07, with a market capitalization exceeding $21.59 billion.
According to Circle's prospectus, the company currently derives the vast majority of its revenue from interest and investment income generated by its USDC reserves. In 2024, this reserve income reached $1.661 billion, accounting for 99.1% of total revenue. However, in the context of potential future interest rate cuts, the sustainability of a business model solely reliant on reserve income faces challenges. In response, Circle stated in its prospectus that it plans to expand into international markets, actively seek regulatory licenses in various jurisdictions, and establish strategic partnerships with large consumer platforms and financial institutions to grow its payments business. When conditions are favorable, Circle will also explore new transaction-fee-based revenue models.
Furthermore, market sources indicate that Gemini, operated by the Winklevoss brothers, has confidentially filed an S-1 form with the SEC, actively pursuing the listing of its compliant exchange. Other crypto companies such as BitGo and Kraken are also reportedly planning similar listings. Given the current market environment and potential shifts in regulatory attitudes, this may signal the beginning of an IPO wave for US crypto companies.
Pump.fun May Launch Token, High Valuation Sparks Market Opportunities and Liquidity Concerns
Rumors about the long-awaited platform token launch by Meme launchpad Pump.fun have intensified recently. According to sources familiar with the matter, the platform plans to conduct a new funding round at a $4 billion valuation, potentially raising $1 billion, and concurrently issue its platform token. Previously, a project using the ticker "PUMP" (originally PumpBTC) announced a name change, freeing up the "PUMP" ticker, which the market interprets as further evidence of Pump.fun's impending token launch.
Data Source: https://dune.com/adam_tehc/pumpfun
According to data from Dune Analytics, since its launch in early 2024, Pump.fun's total protocol revenue has exceeded $740 million, with over 11 million tokens issued through its platform.
Market opinions on Pump.fun's valuation are divided. Supporters believe that as a MEME coin launchpad, Pump.fun has substantial revenue-generating capabilities that can support its valuation. However, some crypto Key Opinion Leaders (KOLs) point out that if its recent 30-day revenue is annualized, Pump.fun's Fully Diluted Valuation (FDV) to annualized revenue ratio is as high as 64, categorizing it as a highly valued project. Some market participants are therefore concerned that in a prolonged bear market or facing strong competitors, Pump.fun's revenue could decline significantly, making it difficult to sustain such a high valuation.
Currently, similar products to Pump.fun are constantly emerging in the market. Although no product has yet fully replaced its market position, Pump.fun undoubtedly faces potential pressure from competitors within the same and other ecosystems. The market is also concerned that if Pump.fun conducts a large-scale fundraising at such a high valuation, it could further drain already tight market liquidity.
Additionally, the Pump.fun team's previous actions of selling protocol revenue on exchanges have caused dissatisfaction among some users. Following this platform token launch, the market will closely watch the token's specific use cases and how the protocol will handle future platform earnings.
Although the intrinsic value of tokens launched via the Pump.fun platform is debatable, the value of Pump.fun itself as a launchpad is widely recognized by the market. It is anticipated that after its platform token is officially launched, the secondary market may witness intense battles between bulls and bears.
About KuCoin Ventures
KuCoin Ventures, is the leading investment arm of KuCoin Exchange, which is a top 5 crypto exchange globally. Aiming to invest in the most disruptive crypto and blockchain projects of the Web 3.0 era, KuCoin Ventures supports crypto and Web 3.0 builders both financially and strategically with deep insights and global resources.
As a community-friendly and research-driven investor, KuCoin Ventures works closely with portfolio projects throughout the entire life cycle, with a focus on Web3.0 infrastructures, AI, Consumer App, DeFi and PayFi.
Disclaimer: This content is provided for general informational purposes only, without any representation or warranty of any kind, nor shall it be construed as financial or investment advice. KuCoin Ventures shall not be liable for any errors or omissions, or for any outcomes resulting from the use of this information. Investments in digital assets can be risky.