Ten31 Timestamp 797,030
The Prime Trust story got even murkier this week, with Nevada regulators alleging that the custodian had lost access to wallets controlling customer funds as far back as December 2021, highlighting again the vulnerabilities introduced by trusted third parties. Elsewhere this week, two more well-known trusted third parties – Fidelity and ARK – re-filed their spot bitcoin ETFs, with amended language to better match BlackRock’s submission from several weeks ago. The SEC seemed to throw cold water on all these applications at the end of the week with several new objections, though a handful of major institutions including Fidelity, Invesco, and VanEck immediately re-filed their applications again to address the agency’s latest concerns, suggesting that the apparently significant institutional appetite for a vehicle like this isn’t going away anytime soon…
Ten31 Timestamp 796,009
History’s long list of lessons on the dangers of counterparty risk added another entry this week, as BitGo’s proposed acquisition of Prime Trust fell apart, presumably on the back of revelations that the prominent “Qualified Custodian” is facing a shortfall of customer funds. Less than a year ago, Prime Trust was a high-profile backend custody provider for a wide variety of bitcoin and “crypto” companies and had just completed a $100 million+ Series B fundraise, illustrating again (as with FTX in November 2022 or SVB in March 2023) the severe Turkey Problem posed by counterparty risk, even when your counterparty appears stable and well-capitalized. Fortunately, bitcoin was designed to address exactly this problem, and we see Prime Trust’s challenges as another validation of bitcoin’s value proposition to individual and corporate treasuries, alongside the growing ecosystem of services and tools that help scale those benefits to a larger institutional audience…
Ten31 Timestamp 795,052
Legacy gatekeepers had a busy few days this week. While the Fed was busy trying to sell the notion of a “hawkish pause” to the market and BlackRock was angling for its cut of the bitcoin pie, the Ten31 team spent several days at Nashville’s Bitcoin Park hosting a summit to showcase what many of our portfolio companies have been building for sectors ranging from financial services to mining and beyond…
Legacy gatekeepers had a busy few days this week, as the Fed finally officially skipped (oh, we mean paused) rate hikes after 10 months of consecutive increases (though officials were quick to insist hikes should resume next month), BlackRock filed for a spot bitcoin ETF (particularly notable given the firm’s track record in getting ETFs approved), and the iOS App Store made life tough for several popular bitcoin apps. While the Fed was busy trying to sell the notion of a “hawkish pause” to the market and BlackRock was angling for its cut of the bitcoin pie, the Ten31 team spent several days at Nashville’s Bitcoin Park hosting a summit to showcase what many of our portfolio companies have been building for sectors ranging from financial services to mining and beyond. The event once again confirmed the clear vibrancy of innovation leveraging the bitcoin ecosystem, one particularly well-timed example of which was Mutiny Wallet kicking off the limited public release of its mainnet lightning wallet. Built as a progressive web app, the wallet runs in a browser and can offer an alternative to censorship-prone walled gardens like app stores… [read more]
Ten31 Timestamp 794,038
The “crypto” industry got one step closer this week to the “regulatory clarity” it has ostensibly been seeking for years, as the SEC finally brought forth lawsuits against Binance and Coinbase after months of anticipation and speculation. The suits allege a wide variety of misconduct and violations on the parts of the two exchanges, perhaps the most significant of which is the claim that the businesses have been listing and making markets in unregistered securities. The agency explicitly listed many popular tokens – including BNB, BUSD, Cardano, and Solana – as securities, setting the stage for what is sure to be a protracted legal battle that will only further cloud the path forward for the non-bitcoin crypto industry. While we won’t hazard any guesses about the ultimate outcomes of these cases, this week’s events are unsurprising to us and further underscore the importance of Ten31’s exclusive focus on bitcoin and the companies building on it. The SEC and CTFC’s numerous restatements that bitcoin is a commodity may not be above long-term challenges from politically motivated regulators and legislators, but they clearly offer a level of de-risking that – along with bitcoin’s numerous fundamental differentiators – makes bitcoin the only digital asset worthy of serious institutional investment…
Ten31 Timestamp 792,963
Both bitcoin mining difficulty and the outlook for US national debt hit all-time highs this week, as Congress passed not only an increase but an outright suspension of the debt ceiling until January 2025. Among the few upsides of the latest debt ceiling charade was the apparent tabling of the White House’s proposed new 30% excise tax on bitcoin mining (though passage of this measure was unlikely regardless). Mining also scored some local regulatory wins in Texas this week, including the failure of a bill that would have limited miner participation in demand response programs and a potential new tax incentive for mining with flared gas…
Ten31 Timestamp 791,947
While politicians continue to theatrically rearrange the deck chairs on the Titanic, the bitcoin ecosystem saw some noteworthy developments this week. There have now been three presidential candidates in as many weeks to proactively project a positive stance toward bitcoin. While these are just high-upside, low-stakes gestures at this point and we put little stock in the promises of politicians trying to win elections, we at least find it notable that bitcoiners have become enough of a recognized voting bloc to merit these kinds of political appeals…
Ten31 Timestamp 790,900
The Ten31 team spent the week in Miami at the Bitcoin 2023 Conference. Among the highest profile updates were Strike’s rollout of its global money app, which will expand Strike’s availability to more than 3 billion people, and Mempool.space’s new transaction accelerator service, which will offer individuals and enterprises a streamlined way to push lower-fee transactions awaiting confirmation forward in mempool queues…
Ten31 Timestamp 789,857
The bitcoin blockchain was busy this week, as the BRC-20 token frenzy reached a fever pitch. Fortunately, bitcoin was designed to accommodate sudden and sustained spikes in blockspace demand, and the network passed this latest stress test with flying colors. To the extent that bitcoin continues to gain users and demand for economically dense settlement transactions, we expect fees to use the network’s scarce blockspace to increase accordingly – said another way, fees are designed to pump forever…
Ten31 Timestamp 788,789
Instability across traditional asset classes continued to dominate headlines this week, as questions about the health of the banking system loomed large following Monday morning’s takeout of First Republic Bank by JP Morgan. It was a busy news week on the bitcoin front as well. Most notably, the Kingdom of Bhutan announced it would be ramping up its mining operations with a $500 million investment, showing sovereign bitcoin adoption continuing to increase at the edges…
Ten31 Timestamp 787,794
With the bitcoin network now just under a year away from the next halving and major financial institutions failing left and right, we continue to expect the coming months to be especially fruitful for new bitcoin adoption and development of innovative new bitcoin applications…
Ten31 Timestamp 786,283
The bitcoin ecosystem saw a variety of exciting updates this week. On the business front, Unchained announced a $60 million Series B fundraising round, a brief roadmap for what’s next, and a new look for the brand...
Ten31 Timestamp 785,723
Several more data points this week suggested global central banks are likely nearing the end of recent tightening cycles. Meanwhile, bitcoin’s accelerating penetration into emerging markets continued at a steady clip this week…
Ten31 Timestamp 784,784
Macro data generally continued to look worse this week, and multiple central banks either paused rate hikes or pointed to the likelihood of faster than expected easing in the relatively near term. On the bitcoin front, the week saw a mixed set of regulatory developments at the state level…
Ten31 Timestamp 783,778
The cascade of bank failures over the last month, the inevitable currency debasement necessary to respond to those failures, and the latest piece of overreaching legislation with the RESTRICT Act serve as further reconfirmation of the importance of permissionless, censorship-resistant systems like bitcoin and the technologies built on top of it…
Ten31 Timestamp 782,738
This week was fraught with ongoing signs of an increasingly unstable macro backdrop. As we so often point out in the Timestamp, bitcoin continues to do exactly what it was designed to do despite all this noise – most notably, the network saw an 8% upward difficulty adjustment on Thursday as hashrate hit an all-time high of ~340 EH/s, over 2x the pre-China ban highs of spring 2021…
Ten31 Timestamp 781,667
More cracks in the fiat dam appeared this week in the wake of Silicon Valley Bank’s implosion. While we tend not to focus much on near-term price gyrations, we think bitcoin’s outsized move up this week is a noteworthy manifestation of the market realizing that the jig is up on Quantitative Tightening and there is a desperate need for a liquid savings asset free from counterparty risk in an increasingly unstable environment…
Ten31 Timestamp 780,630
The headline that will likely dominate the financial news cycle for weeks to come was the sudden collapse of Silicon Valley Bank. Ten31 fully expects near-term volatility across the economy as a result of this week’s events, but we have never been more validated in our core thesis: enterprises and retail customers alike are waking up to the desperate need for better money, and the companies building on bitcoin today are well positioned to provide the critical infrastructure necessary for that transition…
Ten31 Timestamp 779,525
The ongoing fallout from capital misallocation to “crypto,” accelerating regulatory ire resulting from that fallout, and the gradual but steady push toward centralized financial surveillance continue to point to the importance of the sound bitcoin-exclusive infrastructure Ten31 is investing in…
Ten31 Timestamp 778,258
Following several weeks of escalating regulatory pressures on the “crypto” industry discussed in recent issues of the Timestamp, the space got a bit of a breather this week. We remain focused on the impressive resilience of the bitcoin network, which once again dynamically and organically adjusted to transaction demand to clear an 80+ block, multi-week backlog without any central coordination or board of governors…
Ten31 Timestamp 777,428
The regulatory vice continued to tighten around the “crypto” industry this week. Meanwhile, around the world, the value proposition of absolutely scarce, politically neutral, internet-native money was once again on display this week…