ESO's Monthly Start-Up

October 2025

State of Crypto

Bitcoin just set an all-time high, crossing $125k. This price action arrives alongside a strong year for crypto in general following a shift in policy that spurred a string of IPOs and recently a very large late-stage raise.

What has changed this time around?

Policy and access. The SEC launched a Crypto Task Force to pursue clearer rulemaking and registration pathways. Congress passed the GENIUS Act, the first comprehensive U.S. stablecoin law, setting national standards for issuers and reserves. The Anti-CBDC Surveillance State Act passed the House in July and is pending in the Senate; if enacted, it would prohibit the Fed from issuing a retail CBDC, reinforcing the role of private-sector stablecoins. The Senate is also reviewing the House-passed CLARITY Act, a broader market-structure bill now with the Senate Banking Committee. Net effect: clearer rules and supervision raise the floor and pave the way for broader adoption and upside

Valuation Snapshot

The tape speaks for itself. Bitcoin is at highs, and Coinbase has reclaimed levels above its 2021 direct-listing price after a deep 2022 drawdown. Recent IPOs added fresh comps across trading: eToro (ETOR), Bullish (BLSH), Gemini (GEMI); payments: Circle (CRCL); and lending: Figure (FIGR), while private appetite is evident in Kraken’s $500M round at ~$15B.

Flows are confirming the move: crypto investment products just posted a record $5.95B weekly inflow, with spot bitcoin ETFs capturing a large share.

Where it goes next looks a lot like last month’s AI setup: valuations are pricing in hype and recent tailwinds, but durability will hinge on policy finish lines that entrench and legitimize the tech, and real enterprise adoption that broadens revenue beyond trading and reduces cycle sensitivity.

Why It Matters

IPO Pipeline: Kraken remains the next biggest domino, but the new funding likely pushes timing back. Others in the mix include FalconX and Ripple, though firm plans remain unannounced.

Reality Check: The last cycle’s playbook still applies: many names took sharp valuation haircuts and some failed outright (FTX remains the cautionary tale). Premiums return quickly, but companies without durable revenue or compliance maturity are exposed when momentum cools. Echoing last month’s AI discussion, Morgan Stanley’s Wealth CIO has been advising clients to take profits in small-caps and unprofitable tech, a reminder that froth can fade fast when quality is thin.

For Employees: Treat comp and liquidity like an operator, not a tourist: be deliberate and review your options. Whether you hold public names such as Circle, Gemini, eToro, Bullish, or Coinbase, or you are at a relatively liquid private company like Kraken, reassess when a window opens, including partial sales rather than all-or-nothing moves. Today’s marks may feel great, but they are not unprecedented: Kraken’s latest valuation is still below levels seen in 2021 secondaries, and Coinbase is only now clearing prices from four years ago. The takeaway is simple: use windows to make intentional decisions aligned with your plan, not the mood of the moment.

Tips of the trade

A section where we provide helpful tips for anyone with stock options or shares at private companies.

One Big Beautiful Bill

Bit late on this news, but we wanted to touch on how the OBBB affects startup employees. Overall, OBBB nudges the tax math in your favor a bit, but overall nothing major for the every day startup employee.

What did OBBB Change for Startup Employees?

AMT: Exemptions remain high, which is good. OBBB locks in the favorable 2017 TCJA levels. Starting in 2026, AMT phase-outs begin lower ($500k single, $1M joint) and ramp faster, so higher earners hit AMT sooner and should plan exercises with that in mind.

QSBS: Tax exemption cap rises to $15M, which only matters if you stood to make more than $10M (previous cap). Holding period shortens for stock issued after July 4, 2025 to 3 years at 50 percent, 4 years at 75 percent, 5 years at 100 percent. Company asset test moves to $75M. widening eligibility a bit.

SALT: Deduction cap set to $40K for 2026–2029. Helpful, but not a reason to force equity moves.

Takeaway

OBBB is a net positive and makes QSBS a bit friendlier, but it does not change the core playbook. Know your issuance date, watch AMT exposure, and remember that liquidity and company outcomes move the needle more than anything. The bigger read is directional: policy is leaning more startup-friendly, and the risk of punitive rules looks lower than it did a year ago.

Funding your option exercise can be expensive and a require a large capital outlay. Feel free to reach out to us to discuss your options for partnering with ESO Fund to exercise your options risk-free.

ESO Fund does not provide legal, financial, or tax advice.

Septembers's Top Ten:

  1. The Fed cut 25 bps in September. Cheaper capital eases late-stage math, widens exit windows, and lowers discount rates on growth. Watch guidance on the pace of follow-on cuts into Q4.

  2. September looked like a truely open IPO window. Figure, Gemini, Klarna, Via, and Netskope all reached the public markets, with solid demand and a few above-range pricings. The mix spans crypto, fintech, mobility, and security, the kind of breadth you want to see when listings restart. New debuts refresh comps for late-stage valuations and give employees clearer paths to liquidity. Expect more filings into Q4, even with some bubble talk going on.

  3. Q3’s biggest rounds: Anthropic $13B, xAI $5.3B, Mistral $2B. Foundation models still dominate dollars and set the bar on capital needs and go-to-market for the rest of AI.

  4. OpenAI is turning ChatGPT into a place you can actually buy things. In September it launched Instant Checkout and early partnerships so shoppers can purchase from Etsy sellers and, next, Shopify stores, inside chat. Paired with the Statsig deal, this shifts the story from demos to real transactions and faster product testing that can lift merchant sales.

  5. Databricks Series K closed $1B at >$100B valuation and crossed a $4B run rate with positive FCF. Late-stage appetite remains when the revenue engine is proven and expanding into AI workloads.

  6. Vercel Series F Raised $300M at $9.3B with an additional ~$300M tender. Developer experience plus AI agents is the theme: ship faster, abstract infra, monetize usage at enterprise scale.

  7. Stripe unveiled Open Issuance, a way for companies to launch and manage their own stablecoin. For startups, that means an easier path to add dollar-linked payments or treasury features. It also raises the competitive bar, since a more credible setup invites more players. If customers adopt it, expect stablecoins to show up in checkout, payouts, and cash management.

  8. Workday buys Sana to revitalize its training and knowledge tools, reflecting a trend where companies are investing in AI systems that put content, chat, and work tasks all in one place.

  9. Meta plans to buy Rivos to build its own AI chips and rely less on outside vendors. It is an infrastructure move: cheaper, more controllable compute to run bigger models at scale. That helps AI apps today and supports the broader trend of bringing more of the stack in-house across data-heavy fields, crypto included.

  10. Atlassian is buying The Browser Company, maker of Arc. The read is simple: the browser is becoming the work hub where docs, tickets, and AI helpers live. It is also a sign Atlassian feels the heat from AI-native tools and wants a new surface to tie Jira, Confluence, and its agents together.

    Why It Matters:

    Cheaper money via Fed rate cuts is sustaining the speculative AI and crypto bull market and keeping the IPO window open. While high valuations are fueled by hype and future potential, there is significant intrinsic value emerging through widespread enterprise adoption of both technologies.

Startups that are hiring!

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About ESO Fund

ESO Fund empowers startup employees to turn their stock options into reality. Since our inception in 2012, we've been dedicated to providing risk-free funding for the exercise of stock options, ensuring that individuals can seize the opportunities embedded in their equity.

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